ESCRIPTIVE 
CONOMICS 


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WILLIAMS  &  ROGERS  SERIES 


DESCRIPTIVE 

ECONOMICS 


AN 


ii^teoductio:n^ 


TO 


Economic  Science 


FOR   USE    IN 


ACADEMIES    HIGH  AND  NORMAL  SCHOOLS 


AND 


BUSINESS  COLLEGES 


MYRON  T.  BLY,  ESQ., 

OK  THE   ROCHESTER    (n.  T.  )    BAB,    AUTHOR  OF  BUSINESS   LAW 


NEW  YORK    • :  •    CmCINNATI    • :  •    CHICAGO 

AMERICAN    BOOK    COMPANY 


Entered  according  to  Act  of  Congrress,  in  the  year  1893, 

By  WILLIAMS  &  ROGERS, 

In  the  Office  of  the  Librarian  of  Congress,  at  Washington,  D.  C. 

w.  p.  4 


PEEFAOE. 


This  work  hasbeen  prepared  on  the  theory : 

1,  That  the  subject  of  Economics  does  not  necessarily  involve 
all  the  abstract  and  deductive  reasoning  commonly  attributed 
to  it. 

2,  That  it  bears  an  exceedingly  close  relation  to  the  prac- 
tical affiiirs  of  every-day  life  in  all  stages  of  social  and  political 
development. 

3,  That  this  practical  relation  may  be  cogently  and  easily 
represented  by  reference  to  the  actual  movements  of  people  in 
the  various  stages  of  economic  development. 

4,  That  delineation  of  economic  activity,  commencing  with 
that  connected  with  the  lower  economic  stages  and  passing  on 
to  the  higher,  not  only  brings  out  the  practical  side  of  the 
subject,  but  also  compels  interest  in  it. 

5,  That  the  wants  of  the  highest  civilization  are,  after  all, 
merely  amplifications  of  and  superadditions  to  the  three  origi- 
nal and  necessary  wants  of  savagery,  viz:  wants  of  food,  cloth- 
ing, and  shelter.  All  modern  wants  are  but  differentiations 
of  these.  Their  development,  therefore,  together  with  the 
development  of  the  processes  by  which  their  satisfaction  is 
secured,  furnishes  a  proper  and  natural  basis  for  study. 

The  work  is  a  wide  departure  from  the  ordinary  plan  of  most 
elementary  works  on  Political  Economy,  or,  as  it  is  preferably 
called.  Economics.  These  works  generally  commence  with  an 
abstract  discussion  of  wealth  or  value.  In  the  following  pages 
the  terms  wealth  and  value  are  nowhere  used  in  a  technical 
sense,  and  the  same  is  true  of  most  of  the  technical  terms  of 
Economics.  At  the  same  time,  however,  the  theories  to  which 
these  terms  give  rise,  are  indirectly  discussed  and  all  the  well 
known  propositions  of  Economics  are  clearly  and  fully  set  forth. 

It  is  hoped  that  the  student  and  reader  will  find  here  the 
collection  of  economic  phenomena,  classified  and  arranged  as 
required  for  the  more  abstract  reasoning  and  generalizations 
relating  to  the  higher  branches  of  the  subject. 


OOI^TEI^rTS. 


INTRODUCTION. 

Chaptek      I. — The  Akt  of  Getting  a  Living 7 

Chaptkb     II. — The  Popular  Need  op  Economic  KNOWiiEDQE..  14 

Chapter  III. — Thb  Struggle  op  Life 19 

Chapter   IV. — Man's  Wants  and  Their  Satisfaction 23 

PART   I. 

ECONOMICS  OF  THE  FAMILY. 

Chapter        I. — The  Beginning  of  Industrial  Society.... 29 

Chapter       II. — The  Fruit  and  Nut  Gatherer 35 

Chapter     III. — The  Fisher  and  Hunter 37 

Chapter     IV. — The  Herdsman 40 

Chapter      V. — Wants  and  Employments  in  Family  Economics  47 

Chapter     VI. — The  Capital  of  the  Family 51 

Chapter   VII. — Primitive  Bartering  and  Manufacturing 55 

Chapter  VIII. — Summary  op  the  Characteristics  of  Family 

Economics 59 

PART   II. 

ECONOMICS  OF  THE  VILLAGE. 

Chaptbb     I. — The  Agriculturist 68 

Chapter    II. — The  Village  Community 73 

Chapter  III. — The  Land  and  the  Laborer 79 

Chapter  IV. — Village  Housekeeping 87 

Chapter    V. — The  First  Forms  of  Money 93 

Chapter  VI. — A  Review  of  the  Economic  Progress 97 

PART   III. 

ECONOMICS  OF  THE  CITY. 

Chapter     I.— The  Trader 101 

Chapter    IL— The  Craftsman 117 

Chapter  III. — The  Rise  of  Economic  Classes 121 

Chapteb  IV. — Money  the  Medium  of  Exchange 127 

V 


VI  CONTENTS. 

PART   IV. 

ECONOMICS  OF  THE  NATION. 

Chapter      I. — The  Industrial  Stage  of  Economics 135 

Chapter    II. — Land,  Labor  and  Capital 140 

Chapter  III. — The  Division  op  Employments 170 

Chapter  IV. — The  Economics  op  Population... 174 

Chapter    V. — Growth  op  the  Industrial  Revolution 180 

Chapter  VI. — The  Money  of  the  Nation 185 

PART   V. 

INTERNATIONAL  ECONOMICS. 

Chapter      I.— International  Commerce 207 

Chapter    II.— International  Economic  Problems 223 

Chapter  III. — A  World  Economy 229 


Descriptive  Economics. 


i:n'troduotioi^. 


CHAPTER  I. 
THE  ART   OF   GETTING  A   LIVING. 

A  Bird's-eye  View  of  the  Subject. — Visitors  to  the  Pars 
Exposition  were  advised  to  ascend  the  Eiffel  Tower  and  secure 
a  bird's-eye  view  of  the  grounds  and  buildings. 

This  was  to  be  the  first  act  of  the  first  visit.  It  was  urged 
that  a  general  conception  of  the  whole  exposition  would  enable 
one  to  comprehend  and  classify  the  parts.  For  the  same  reason 
it  will  be  well  to  commence  our  study  of  economics  with  a  bird's- 
eye  view  of  the  subject.  Having  had  a  general  view  we  can 
enter  upon  the  classification  and  study  of  the  parts. 

A  Point  of  View.  —  Place  yourself,  during  the  morning 
hours,  on  any  of  the  great  streets  of  the  great  cities  of  the 
world;  on  Fricdrichstrasse,  on.  the  Strand  or  on  Broadway.  A 
tide  of  human  beings  pours  out  of  the  by-streets  and  surges 
along  the  main  channel.  How  were  they  all  sheltered  last 
night?  How  did  they  breakfast?  How  will  they  dine?  How 
will  they  be  fed  and  sheltered  to-night  and  to-morrow?  How 
did  they  procure  the  clothing  of  such  varied  cost  and  of  such 
various  stuffs?  How  will  they  be  clothed  in  the  future?  If 
you  choose  Broadway,  commence  early  at  the  corner  of  Grand 
street.  The  scene  reminds  you  of  the  exit  of  bees  from  a  hive 
when  the  sun  has  dispersed  the  dew.  Saunter  down  until, 
between  ten  and  eleven,  you  are  at  the  corner  of  Wall  street. 
There  is  another  hurrying  throng,  but  the  people  may  be  a 

7 


8  DESCRIPTIVE  ECONOMICS. 

little  better  dressed  than  at  Grand  street.  Like  the  bees,  how- 
ever, going  forth  from  the  hive  in  the  morning,  everyone  seems 
to  have  some  absorbing  purpose. 

Another  Point  of  View.  —  Cross  Broadway  and  ascend 
the  spire  of  Trinity  Church.  The  stream  of  anxious  faces  is 
lost  to  view,  but  in  its  place  there  are  the  roofs  of  the  city,  in- 
tersected by  the  streets,  like  the  paths  of  an  ant  hill.  Away 
on  the  Jersey  and  Connecticut  shores  and  up  the  Hudson  are 
the  outlines  of  other  cities,  and  of  towns  and  villages,  with  many 
fields  and  farm  houses  between.  Down  below  no  one  is  culti- 
vating or  herding.  How  will  they  get  bread  and  meat?  Out 
on  the  farms  no  one  is  trading  or  manufacturing.  How  will 
they  get  clothing  and  utensils?  No  one  is  quarrying  or  lum- 
bering in  the  cities.  How  do  they  get  materials  for  the  build- 
ings? How  are  the  lumbermen  and  quarrymen  supported  in 
the  distant  forests  and  quarries  where  they  are  hewing  and 
quarrying  instead  of  sowing  and  reaping?  Very  few  of  the 
people  whose  homes  come  within  the  view  are  engaged  in 
making  things  for  their  own  use.  They  are  not  doing  any- 
thing toward  the  direct  satisfaction  of  their  own  wants.  They 
make  clothes  which  they  will  never  wear.  They  are  baking 
bread  which  they  will  not  eat,  and  building  carriages  in  which 
they  will  never  ride.  Many  are  doing  something  which  does 
not  satisfy  hunger  or  thirst,  nor  produce  clothing  or  shelter. 
How  will  they  all  get  what  they  want  and  what  they  need? 
How  are  their  wants  satisfied?  How  are  your  wants  and  my 
wants  satisfied?  In  some  of  those  distant  towns  most  of  the 
inhabitants  are  engaged  in  making  a  single  class  of  articles. 
It  may  be  shoes,  and  perhaps  men's  coarse  shoes  at  that.  They 
must  have  ladies'  shoes  and  children's  shoes,  besides  other 
clothing  and  food.     How  will  they  get  these  things? 

Economic  Knowledge. — The  person  who  knows  that  such 
questions  exist  and  can  answer  them  has  some  economic  knowl- 
edge. It  is  economic  knowledge  in  a  restricted  sense.  All 
these  toilers  of  the  cities,  the  villages  and  the  farms;  all  human 
beings  in  fact,  have  wants.  We  all  want  the  necessities  of  life. 
We  not  only  want  them,  but  we  must  have  them.  "  Man  must 
eat  or  die."    In  the  next  place  we  want  the  comforts  of  life. 


THE  ART  OF  GETTING   A    LIVING.  9 

We  want  them  in  order  to  live  as  we  were  designed  to  live, 
above  the  brute  creation.  We  must  all  be  doing  something 
towards  supplying  these  wants.  Even  if  a  constant  supply  of 
manna  were  rained  down,  we  would  have  to  gather  it.  We  are 
born  to  work,  and  in  the  ordinary  course  of  things  every  man 
and  woman  does  something  toward  procuring  the  wants  of  life. 
In  addition  to  the  comforts  of  life  many  men  want  its  luxuries. 
We  have,  therefore,  three  classes  of  wants  which  mankind  is 
striving  to  procure,  (1)  necessities,  (2)  comforts  and  (3)  luxuries. 

In  a  more  general  sense  economic  knowledge  is  knowledge 
of  the  ways  and  means  practiced  or  employed  by  man  to  satisfy 
these  wants.  In  the  language  of  a  German  economist,  it  is 
knowledge  of  activity  "directed  to  the  acquisition  of  material 
things  for  the  satisfaction  of  human  wants."  This  activity 
constitutes  our  economic  life. 

Industrial  Society. — When  men  try  to  procure  the  neces- 
sities of  life  and  satisfy  their  wants,  they  soon  find  that  they 
must  come  in  contact  with  other  men.  The  hermit  life  exists, 
in  modern  times,  only  in  imagination.  The  hermit  discovers 
that  unless  he  enters  into  his  hermitage  with  a  large  stock 
of  the  articles  which  the  labor  of  other  men  has  helped  to  pro- 
duce, he  is  soon  in  the  direst  want.  In  all  places  and  under 
all  circumstances,  men  are  dependent  upon  each  other.  Among 
modern  nations  in  particular,  they  find  that  getting  a  living 
brings  them  into  close  contact  with  each  other.  There  is  less 
of  this  mutual  dependence  among  savages.  Even  in  the  rudest 
times  of  which  history  gives  any  account,  however,  there  has 
always  been  some  kind  of  social  dependence.  There  has  always 
been  the  society  of  the  family.  Man  has  never  existed  in  a 
perfectly  isolated  state.  This  mutual  relationship  and  depend- 
ence among  men,  in  the  process  of  getting  a  living,  constitutes 
the  foundation  of  industrial  society.  Industrial  society  has 
come  to  be  that  harmonious  system,  "operating  as  a  piece  of 
mechanism,"  whereby  the  wants  of  each  individual  are  supplied 
for  him,  and  brought  to  him  from  the  various  parts  of  the  world; 
and  as  every  man  has  wants,  so  every  one  is  a  member  of  indus- 
trial society.  If  each  individual  was  sufficient  unto  himself;  if 
each  one  raised  his  own  wheat,  and  made  his  own  flour;  pas- 


10  DESCRIPTIVE  ECONOMICS. 

tured  and  slaughtered  his  cattle;  sheared  his  sheep  and  made 
his  own  clothes;  in  fact,  satisfied  all  his  wants  by  his  personal 
efforts,  there  would  be  no  such  thing  as  industrial  society. 

Its  Extensiveness. — Among  savage  peoples,  industrial  so- 
ciety does  not  extend  beyond  the  family  circle.  The  family 
provides  its  simple  wants  by  the  labor  of  its  own  members.  As 
civilization  advances,  a  larger  body  of  individuals  are  brought 
into  contact  with  each  other.  Our  wants  become  greater  and 
more  varied  as  civilization  advances.  When  they  become  as 
numerous  as  pertain  to  highly  cultivated  life,  we  may  be  de- 
pendent on  many  men  located  in  distant  parts  of  the  world. 
If  you  want  a  sealskin  garment  instead  of  a  woolen  garment, 
you  may  be  dependent  upon  the  sealer  in  Alaska,  the  dyer  in 
London,  and  the  furrier  somewhere  else.  Industrial  society, 
therefore,  is  not  confined  within  government  boundary  lines. 
It  is  not  like  political  society,  governed  and  directed  by  a  con- 
stituted centralized  authority.  It  knows  no  tongue  and  no 
kinship.  It  is  the  sum  of  all  the  individuals  who,  directly  or 
indirectly,  depend  upon  each  other  in  the  struggle  of  life.  Set 
down  in  a  vertical  column  all  the  occupations  and  employments 
of  men,  commencing  in  alphabetical  order  with  abacist,  a  man 
who  gets  a  living  by  casting  accounts,  to  zymologist,  the  man 
who  devotes  his  time  to  the  fermenting  of  liquors,  and  in- 
cluding most  of  the  women  under  the  head  of  cooks  or  house- 
keepers, add  up  the  list  and  the  sum  would  represent  ijidustrial 
society. 

Economics. — "When  we  understand  what  economic  know- 
ledge is,  it  is  not  difficult  to  understand  what  "economics" 
means.  It  pertains  first  of  all  to  the  arrangement  of  economic 
knowledge  in  a  classified  and  systematic  form.  This  book  is 
an  attempt  to  arrange  economic  knowledge  for  the  purpose  of 
study,  and  the  work  as  a  whole,  therefore,  may  be  called  a 
definition  of  economics.  There  have  been  many  definitions 
of  the  subject.  Some  of  them  are  not  difficult  to  compre- 
hend. Others  involve  the  consideration  of  the  principles  of 
economic  science  and  require  a  large  range  of  economic  know- 
ledge. It  would  answer,  at  this  stage  of  our  study,  to  define 
it  as  the  art  of  getting  a  living.     If  we  stopped  there,  however, 


THE  ART  OF  GETTING   A   LIVING.  11 

we  would  find  that  our  definition  lacked  exactness.  We  will 
go  a  little  further  and  call  economics  a  study  of  men  in  their 
relations  to  industrial  society.  We  may  say  that  its  aim  is  to 
show  us  how  men  are  conditioned  in  the  struggle  of  life  by  their 
necessary  connection  with  industrial  society,  and  the  member- 
ship which  they  necessarily  have  in  it.  After  all,  any  definition 
which  we  might  adopt  would  be  open  to  criticism,  because  it 
has  already  been  said  that  the  whole  work  is  the  definition. 
We  are  not  studying  an  exact  science  in  which  exactness  of 
definition  is  possible  or  necessary. 

Economic  Activity. — During  the  progress  of  our  study  we 
shall  have  frequent  occasion  to  refer  to  the  economic  activity 
of  individuals  and  of  peoples.  We  often  ask  of  an  individual: 
**  What  is  he  doing  for  a  living  ?"  The  answer  to  that  ques- 
tion is,  practically,  a  statement  of  the  man's  economic  activity. 
It  means  his  economic  life;  what  he  does  toward  satisfying 
his  wants  and  what  his  relations  are  to  those  with  whom  he  is 
directly  in  contact  and  what  his  relations  are  to  industrial  so- 
ciety at  large.  If  we  deferred  strictly  to  the  writings  of  the 
best  economists  we  should  have  to  add  largely  to  our  definition 
of  economic  activity.  We  will  make  the  additions  in  the  course 
of  the  study,  however,  and  for  the  present  consider  a  man's 
economic  activity,  and  which  is  the  same  thing,  his  economic 
life,  to  consist  of  all  that  he  does  for  a  living — both  the  seen 
and  the  »nseen.  That  is  to  say,  if  he  drives  a  street  car  for  a 
dollar  and  a  half  a  day,  his  economic  activity  consists  of  his 
day's  work,  which  we  see  him  do,  and  of  all  the  minor  things 
connected  with  the  spending  of  the  money,  some  of  them  seen 
but  most  of  them  unseen.  The  economic  activity  of  a  nation 
or  a  people,  or  its  economic  life,  is  the  aggregate  of  the  activity 
of  the  individuals. 

Political  Economy. — This  is  the  term  hitherto  most  used  in- 
stead of  Economics.  We  may  consider  the  two  terms  as  mean- 
ing the  same  thing.  French  writers  claim  that  one  of  their 
number,  M.  de  Watteville,  first  used  the  term  political  econ- 
omy at  the  head  of  one  of  his  works  in  1615.  It  has  been  used 
ever  since,  and  centuries  of  usage  stand  in  the  way  of  substi- 
tuting the  term  economics.     The  time  will  doubtless  come. 


12  DESCRIPTIVE  ECONOMICS. 

however,  when  the  greater  definiteness  and  convenience  of  the 
word  economics,  will  overcome  the  prejudice  of  usage,  and  it 
will  supplant  the  term,  political  economy. 

Descriptive  Economics,  pertains  to  the  simple  statement 
and  narration  of  economic  facts.  There  are  supposed  to  be 
economic  laws  which  regulate  industrial  affairs,  and  the 
material  welfare  of  men.  It  would  be  the  province  of  the 
science  of  economics  to  ascertain  these  laws;  to  state  them;  to 
discuss  the  theories  pertaining  to  them,  and  upon  which  they 
are  founded.  Descriptive  economics  would  have  little  to  do 
with  these  laws  or  theories,  although  it  would  call  them  to  its 
aid  whenever  necessary.  It  would  preferably  be  limited  to  the 
description  or  statement  of  the  manner  in  which  men  obtained  a 
living  and  satisfied  their  material  wants  in  all  the  past,  and  how 
they  satisfy  them  to-day.  We  shall  see  that  industrial  society 
has  passed  through  certain  well  defined  stages.  They  are  called 
the  economic  stages.  Descriptive  economics  would  describe 
these  stages,  stating  the  facts,  just  as  a  historian  would  narrate 
the  history  of  a  city.  It  would  follow  their  sequence  and  de- 
scribe the  economic  activity  characterizing  each  stage.  It  is 
the  province  of  the  theoretical  economist  to  draw  conclusions. 
But  before  he  can  draw  conclusions  the  economist  must  have, 
or  at  least  he  should  have,  a  stock  of  economic  facts,  just  as 
the  biologist  must  have  systematic  descriptions  of  the  structure 
and  functions  of  different  types  of  animals,  before  he^an  form 
generalizations  concerning  the  various  types.  Descriptive  eco- 
nomics would  gather  and  classify  economic  facts  relating  to  the 
various  stages  of  economic  evolution  by  the  use  of  which  you 
can  draw  general  conclusions  as  to  economic  phenomena,  or  test 
those  you  have  already  drawn. 

Relation  to  Other  Studies. — Economics  is  usually  classed 
among  the  social  sciences.  It  is  a  subdivision  of  sociology. 
Sociology  is  itself  a  subdivision  of  the  larger  branch  of  knowl- 
edge, anthropology  or  the  science  of  man.  In  looking  over  a 
work  on  anthropology  we  find  one  part  devoted  to  ethnography, 
describing  the  various  races  of  men  and  their  different  char- 
acteristics and  habits.  After  passing  other  parts  we  come  to  a 
part  on  sociology,  which  treats  of  man  as  living  in  society. 


THE  ART  OF  OETTINO  A   LTVINO.  13 

Under  sociology  we  find  a  chapter  entitled  "  The  Arts  of  Life." 
Descriptive  economics  has  to  do  with  the  arts  of  life.  The 
study  of  economics  is  still  in  its  infancy,  and  much  economic 
knowledge  still  remains  to  be  made  certain  and  definite. 
There  is  much  that  is  unsettled,  and  therefore  much  difference 
of  opinion  among  writers  on  economics.  This  difference  of 
opinion  relates  more  to  the  so  called  economic  *'laws,"  to  the- 
ories and  general  conclusions  than  to  descriptive  economics 
such  as  we  propose  to  study. 

The  Art  of  Getting  a  Living-. — Having  surveyed  the 
subject  we  see  that  it  pertains  to  the  art  of  getting  a  living. 
It  will  appear,  at  the  first  glance,  that  many  subjects  to  be 
discussed  have  nothing  to  do  with  getting  a  living.  Careful 
examination  of  them,  however,  will  show  that  they  all  relate  to 
the  material  welfare  of  mankind,  and  by  "living"  is  meant 
not  only  man's  wants  of  necessity — those  which  he  must  have 
in  order  to  live  at  all — but  the  comforts  of  life,  those  which 
he  must  have  in  order  to  live  worthily.  The  ultimate  aim  of 
all  economic  study,  therefore,  is  to  show  how  men  obtain  a  liv- 
ing in  the  various  stages  of  industrial  society,  and  how  the 
getting  of  a  living  is  effected  by  their  membership  in,  and  rela- 
tions to  that  society. 


14  DESCRIPTIVE  ECONOMICS. 


CHAPTEE  II. 

THE   NEED  OF   ECONOMIC   KNOVTLEDGE. 

Its  Practical  Nature. — Economics  under  the  old  title  of 
Political  Economy  has  been  called  ''the  dismal  science."  The 
reason  for  this  lies  in  the  fact  that  the  study  has  usually  been 
confined  to  the  study  of  theories,  and  also  because  the  text 
books  on  economics  have  been  prepared  largely  with  the  view 
of  teaching  theories.  Economic  theories  have  their  place, 
and  their  study  would  be  more  popular  if  economic  facts  were 
first  studied  and  understood.  The  facts  we  are  to  study  are 
the  facts  of  daily  life.  How  men  got  a  living  in  the  ages  of  the 
past;  how  they  get  a  living  to-day.  How  we  get  our  income 
and  how  we  spend  it.  We  have  seen  that  this  is  economic 
knowledge.  It  is  so  closely  related  to  our  welfare — to  our  very 
being  in  fact — that  its  rudiments  ought  to  be  a  part  of  the 
public  school  course  of  study.  There  ought  to  be  a  wide  dif- 
fusion of  economic  knowledge,  (1)  everywhere,  (2)  at  all  times. 
There  are,  however,  some  special  reasons  why  there  ought  to 
be  a  wide  diffusion  of  economic  knowledge,  (1)  in  the  United 
States,  (2)  at  the  present  time. 

Our  Political  Growth,  is  one  of  these  reasons.  There  is 
said  to  be  an  army  of  persons  in  the  employ  of  the  government. 
The  population  of  the  country  is  increasing,  and  the  machin- 
ery of  the  post-oflBce,  the  internal  revenue,  and  other  govern- 
ment bureaus  and  departments,  must  be  extended  accordingly. 
The  number  of  people,  directly  and  indirectly  employed  by  the 
government  is  increasing  from  year  to  year  with  great  rapidity. 
The  temptation  of  political  parties  to  control  these  offices  and 
name  this  army  of  government  employees  is  greater  than  party 
honor  can  withstand.  This  temptation  is  not  likely  to  be  less 
than  it  is  to-day.  The  first  trap  which  a  demagogue  sets  to 
catch  votes,  relates  to  some  question  of  economics.  People 
cannot  be  deceived  as  to  purely  political  questions.  Political 
knowledge  is  too  widely  diffused.     As  to  economic  questions, 


THE  NEED    OF  ECONOMIC  KNOWLEDGE.  16 

however,  many  voters  are  at  the  mercy  of  party  leaders  and 
the  party  press.  Here  we  have  an  illustration  of  the  wisdom 
of  Dr.  Arnold's  saying:  "A  faulty  political  economy  is  the 
fruitful  parent  of  evil." 

Great  Aggregations  of  Capital. — Great  corporations  and 
large  firms,  controlling  vast  capital  and  directing  great  indus- 
tries, are  common  features  of  the  business  of  the  day.  Their  ex- 
istence is  a  reason  why  there  should  be  a  wide  diffusion  of  eco- 
nomic knowledge.  It  is  no  longer  the  railroad  corporations 
solely  T^hich  represent  great  aggregations  of  capital,  although, 
by  a  number  of  them  combining,  practically  under  one  manage- 
ment, the  concentration  of  capital  is  greater  than  ever  before. 
Great  manufacturing  concerns  control  manufactures.  When 
they  begin  to  conflict  and  harm  each  other,  they  form  themselves 
into  a  still  greater  and  more  far  reaching  combination  of  energy 
and  management — the  trust.  There  has  recently  been  a  marked 
tendency  toward  the  formation  of  great  trading  combinations, 
for  the  purpose  of  controlling  larger  trade  in  manufactured 
articles.  You  can  study  this  subject  by  observing  how  in  your 
own  town  or  city,  this  or  that  mercantile  business  which  was 
formerly  conducted  by  an  individual  or  a  firm,  has  been  "  cap- 
italized." The  business  has  been  transferred  to  a  stock  corpo- 
ration for  the  purpose  of  procuring  more  capital  and  enlarging 
its  trade.  Carpets,  groceries,  dry  goods,  are  sold  by  corpora- 
rations.  This  means  fewer  merchants  conducting  an  individual 
busiiless  and  more  men  who  must  seek  employment  in  the  ser- 
vice of  others.  The  change  is  going  on  in  manufactures  which 
has  already  taken  place  in  mercantile  industry.  Not  long  ago 
there  were  many  little  shops  where  the  proprietors,  assisted  by 
one  or  two  workmen,  in  much  the  same  relations  as  existed  be- 
tween the  medieval  master-workman  and  his  journeymen,  car- 
ried on  limited  manufacturing  enterprises.  These  individual 
shops  have  been  closed.  The  proprietors  and  assistants  have 
gone  into  the  service  of  large  manufacturing  concerns.  These 
changes  in  business  methods  involve  changes  in  the  industrial 
life  of  many  individuals  and  affect  the  aggregate  industrial  life 
of  the  nation.  A  wide  diffusion  of  economic  knowledge  will 
allow  of  the  occurrence  of  such  changes  with  less  individual 


16  DESCRIPTIVE  ECONOMICS. 

hardships  and  with  less  chance  of  harm  to  the  industrial  life 
of  the  nation.  We  shall  look  further  into  these  changes  when 
we  come  to  discuss  what  is  called  in  economics  the  division  of 
employments.  The  principle  involved  may  be  illustrated  in 
this  way  :  Our  grandfathers  brought  in  the  wool  from  the  barn 
and  our  grandmothers  wrought  out  the  finished  homespun. 
The  man  made  the  loom,  reared  the  sheep  and  sheared  the 
wool.  The  woman  carded,  spun  and  wove  it,  and  if  need  be 
dyed  it  also,  even  with  home-made  dyes.  She  made  the  coat 
also.  Two  persons  produced  the  garment  ready  for  wear.  In 
our  times  hundreds  of  persons  labor  to  produce  a  single 
coat.  Let  us  look  at  some  of  the  steps  involved.  There  is: 
1,  the  raising  of  the  sheep;  2,  the  transportation  of  the  wool; 
3,  its  manipulation  in  the  factory;  4,  the  building  of  the  intri- 
cate machinery  of  the  factory;  5,  the  grinding  of  the  dyes; 
6,  their  transportation;  7,  dyeing  of  the  cloth;  8,  the  trans- 
portation of  the  cloth;  9,  the  cutting  by  the  cutter;  10,  the 
sewing  by  the  tailor.  These  are  some  of  the  direct  steps  in- 
volving the  direct  application  of  labor.  There  are  many  indi- 
rect steps  involving  indirectly  the  application  of  the  labor  of 
many  other  people.  What  is  true  of  a  coat  is  true  of  a  pair  of 
shoes,  of  a  carriage,  and  of  all  the  articles  of  common  use. 

Great  Labor  Organizations,  suggest  another  reason  why 
economics  should  be  studied.  The  vastness  of  our  territory 
and  resources  seems  to  have  breathed  the  spirit  of  development 
into  the  organization  of  labor  as  well  as  of  capital.  At  any 
rate,  the  organization  of  labor,  from  the  local  trades  union  into 
the  district  union,  the  district  union  into  the  state  federation, 
and  the  state  federation  into  the  national  federation,  has  grown, 
side  by  side,  with  the  growth  of  the  aggregation  of  capital. 
The  aggregation  of  capital,  under  a  single  head  and  manage- 
*ment,  controlling  a  great  number  of  employees  and  their  daily 
bread,  is  likely  to  beget  discontent  among  the  employees. 
Organization  of  labor  will  meet  organization  of  capital,  and  will 
grow  for  the  purpose  of  meeting  it. 

Diversity  of  Climate. — Our  territory  extends  from  the 
climate  of  the  arctics  to  that  of  the  semi-tropics.  Our  natural 
productions  are  such  as  belong  to  these  and  all  intermediate 


THE  NEED    OF  ECONOMIC  KNOWLEDGE.  17 

zones  of  climate.  This  diversity  of  productions  gives  rise  to 
widely  diverse  pursuits,  industries  and  interests.  The 
whole  country,  however,  is  to  be  governed  as  a  political  unit. 
All  industries  must  be  prospered.  The  occasion  demands  the 
wisest  statesmanship.  No  nation  ever  presented  a  finer  field 
for  the  application  of  economic  knowledge.  It  should  be  dif- 
fused s(5  that  it  may  be  used. 

The  Economic  Undertakings  of  Government. — Men.  in 
public  life  are  beginning  to  recognize  the  importance  of  correct 
economic  regulations  in  public  affairs.  Good  economics  in 
governmental  matters  is  seen  to  promote  the  aggregate  industrial 
welfare  of  the  people,  and  when  the  aggregate  industrial  con- 
dition of  the  people  flourishes,  the  nation  flourishes.  Govern- 
ment, therefore,  tends  to  step  in  and  look  after  economic 
matters  which  were  formerly  in  charge  of  private  individuals, 
or  else  entirely  neglected.  Compare  the  annual  messages 
transmitted  in  1893  by  the  President  and  by  the  Governors  of 
the  various  States,  with  those  of  a  period  of  ten  or  fifteen  years 
earlier.  Out  of  fifty  subjects,  separately  discussed  by  President 
Harrison,  one  half  were  economic  questions;  out  of  twenty-one 
subjects  discussed  by  Governor  Flower  of  New  York,  sixteen 
were  economic  subjects.  Unwise  legislation  on  economic  mat- 
ters is  worse  than  no  legislation.  Better  the  "  Laisser  faire," 
or  let  alone  principle  of  Colbert.  Nothing  short  of  a  wide 
diffusion  of  economic  knowledge  will  ensure  correct  economic 
legislation. 

Industrial  Growth. — The  recent  industrial  growth  in  the 
United  States  is  the  last  of  the  subjects  which  might  be  named 
as  bearing  on  a  wide  diffusion  of  economic  knowledge.  This 
growth  has  not  been  greater  than  in  other  countries,  but,  when 
industrial  conditions  are  compared,  it  has  been  more  marked. 
This  industrial  growth  has  given  rise  to  increased  and  more 
varied  wants  and  greater  diversity  of  employments.  Economic 
knowledge  must  be  wide  spread,  so  that  men  may  know  the 
new  conditions  of  getting  a  living.  Some  of  these  new  indus- 
trial conditions  have  been  mentioned  under  the  head  of  ** great 
aggregations  of  capital,"  and  might  be  profitably  repeated  to 
illustrate  the  social  economics  of  industrial  growth.  The 
2 


18  DESCRIPTIVE  ECONOMICS. 

concentration  of  capital,  however,  is  only  a  phase  of  the  recent 
industrial  growth  of  the  nation.  It  was  only  about  twenty-five 
years  ago  when  Emerson  noted  that  it  appeared  to  him  as  though 
the  inventions  of  the  fifty  years  prior  to  his  time  were  equal  to 
all  the  inventions  of  the  fifty  centuries  before  them.  To-day, 
however,  looking  back  over  the  quarter  of  a  century  since  Em- 
erson wrote,  it  appears  to  us  that  its  discoveries  and  inven- 
tions and  new  and  improved  industrial  methods  are  far  more 
important  than  thoise  of  the  previous  half  century. 


THE  STRUGGLE   OF  LIFE,  19 


CHAPTER  III. 

THE  STRUGGLE   OF   LIFE. 

Man's  Three  Necessities. — There  are  three  necessary  wants 
which  men  must  satisfy  in  order  to  exist.  They  must  have  food, 
clothing  and  shelter.  Other  wants  can  be  dispensed  with,  but  if 
nourishment  fails,  and  protection  from  the  storm  and  cold  and 
night  fails,  disease  ensues,  and  starvation  and  exposure  put 
an  end  to  "being.  Most  animals  can  get  along  without  artificial 
clothing  or  shelter.  Nature,  however,  has  failed  to  provide 
man  with  the  bodily  covering  and  protection  which  he  requires 
in  rigorous  climates.  Man's  necessary  wants,  therefore,  are 
more  than  those  of  the  horse  or  the  dog  or  the  bear. 

The  Struggle  for  Food. — The  one  necessary  want  of  all 
animal  creation  is  food.  The  structural  organization  of  men 
and  animals  is  constantly  decaying,  and  as  constantly  being 
renewed.  The  organs  of  motion,  respiration  and  digestion  are 
constantly  subject  to  waste.  The  renewal  must  be  provided 
for.  The  vital  processes  of  life  require  the  presence  of  animal 
heat.  There  must  be  fuel  in  the  shape  of  food  to  keep  the  fire 
burning. 

Carnivorous  Plants. — Man  has  an  easy  time  in  life  com- 
pared to  the  struggle  which  is  going  on  among  the  lower  ani- 
mals. The  difficulty  of  obtaining  the  requisite  supply  of  food 
increases  descending  from  the  higher  structural  organizations 
to  the  lower.  Among  the  lowest  forms  of  animal  life,  like  the 
carnivorous  plants,  the  struggle  becomes  pitiful.  A  sponge  has 
been  likened  by  a  fanciful  writer  to  a  city  where  the  inhabi- 
tants line  the  sides  of  the  streets  and  take  their  food  as  it  passes 
by.  It  is  a  very  pretty  fancy,  but  cruelly  unreal.  The  sponges, 
like  the  sea  lily  and  other  fixed  carnivorous  plants,  are  at  the 
beck  and  nod  of  the  slightest  current.  If  a  current  does  not 
happen  to  bring  infusorians  their  way,  they  starve.  It  is  true 
they  may  reach  out  their  tentacles  for  a  little  way  about,  catch- 
ing wildly  at  the  drifting  food,  but  most  often  it  sweeps  by 


20  DESCRIPTIVE  ECONOMICS. 

them.  The  oyster  can  crane  its  neck  a  little  distance,  and  the 
clam  a  little  farther,  but  ordinarily  they  must  lie  helplessly  by 
and  see,  or  feel,  their  food  drift  away. 

Economic  Struggles  of  Animals. — Ascending  the  scale  of 
animal  life  we  find  the  struggle  almost  as  constant  and  as 
fierce.  It  has  been  aptly  divided  into  two  forms  having  eco- 
nomic aspects.  There  is  first  the  struggle  between  fellows — 
"between  animals  of  the  same  kind  which  compete  for  similar 
food  and  other  necessaries  of  life."  They  can  go  and  seek  it, 
to  be  sure,  but  if  nature  does  not  provide  it,  what  then?  Or, 
if  there  is  not  enough  to  go  round  and  fill  all  mouths  in  peace? 
Then  it  must  be  wrenched  away  with  tooth  and  claw.  After 
the  struggle  between  fellows  for  the  same  food,  comes  the  strug- 
gle between  natural  foes — between  animals  of  different  kinds. 
It  is  the  struggle  between  carnivores  and  herbivores.  The 
struggle  is  now  two-fold.  It  is  between  one  kind — between 
carnivores  for  the  same  food,  and  the  other  kind,  the  herbivores, 
to  escape  their  natural  foes.  The  herbivores  must  not  only  look 
out  for  their  food,  but  must  also  look  out  for  themselves. 
Naturalists  differ  as  to  which  form  of  the  struggle  is  keenest. 
Mr.  Grant  Allen  thinks  it  is  the  struggle  between  fellows — 
between  animals  of  the  same  kind  for  similar  food.  He  proves 
his  theory  by  saying  that  "  the  baker  does  not  fear  the  compe- 
tition of  the  butcher  in  the  struggle  for  life;  it  is  the  Competi- 
tion of  the  other  bakers  that  sometimes  inexorably  crushes  him 
out  of  existence.  In  this  way  the  great  enemies  of  the  indi- 
vidual herbivores  are  not  the  carnivores,  but  the  other  herbiv- 
ores. It  is  not  so  much  the  battle  between  the  tiger  and  the 
antelope,  between  the  wolf  and  the  bison,  between  the  snake 
and  the  bird,  that  ultimately  results  in  natural  selection  or 
survival  of  the  fittest,  as  the  struggle  between  tiger  and  tiger, 
between  bison  and  bison,  between  snake  and  snake.  *  *  * 
The  struggle  is  fierce  between  allied  kinds,  and  fiercest  of  all 
between  individual  members  of  the  same  species." 

Mr.  J.  Arthur  Thompson,  whose  book.  The  Study  of  Aninial 
Life,  contains  many  illustrations  of  the  social  and  industrial 
life  of  animals,  doubts  the  truth  of  Mr.  Allen's  statements, 
holding  that  the  evidence  upon  which  they  are  based  is  very 


THE  STRUGGLE  OF  LIFE.  Ill 

unsatisfactory.  Mr.  Thompson  finds  that  there  are  many  peace- 
ful devices  by  which  animals  have  discovered  a  way  out  of  a 
situation  in  which  a  life  and  death  struggle  might  seeto  in- 
evitable— such  as  separation  into  bands  and  migration. 

Changeful  Surroundings. — There  is  a  third  kind  of  strug- 
gle among  animals  which  has  an  economic  point  also.  It  is 
the  struggle  with  changeful  surroundings.  It  is  the  struggle 
to  adapt  themselves  to  the  changing  condition  of  physical  en- 
vironment, and  as  physical  nature  is  careless  of  life,  it  is  some- 
times called  the  struggle  with  Fate.  "  Changes  of  medium, 
temperature  and  moisture  continually  occur,  and  the  animals 
flee  for  their  liyes,  adapt  themselves  to  new  conditions,  or 
perish."  But  man  must  also  adapt  himself  to  changing  physi- 
cal conditions.  His  necessary  want  of  clothing,  already  re- 
ferred to,  means  that  he  must  adapt  himself  to  the  changes  of 
the  season  and  of  temperature.  Primitive  people  readily  yield 
to  the  struggle  with  fate  as  it  comes  upon  them  in  some  forms 
of  physical  environment.  The  savage  fisherman  sees  a  line  of 
shell  fish  fringing  the  beach.  The  mollusks  have  been  hurled 
up  by  the  surf  and  left  to  die  by  the  receding  tide.  Even  so,  he 
thinks,  nature  may  have  a  fate  in  store  for  him  against  which  it 
is  useless  to  resist,  and  he  gives  way  to  fatalism.  As  we  proceed 
with  our  study  we  shall  see  that  economic  progress  is  the  con- 
quest of  nature  by  man.  Man's  victory  over  fateful  conditions 
has  been  gradual  but  sure,  until  nature  now  rarely  presents 
them  and  man  laughs  at  the  old  terrors  of  physical  environment. 

The  Food  of  Animals. — Billions  of  inf  usorians  upon  which 
acres  of  carnivorous  plants  could  fatten  for  years,  would  make 
a  scant  mouthful  for  a  whale.  If  they  made  a  mouthful  they 
would  afford  but  little  nourishment.  The  food  of  the  higher 
animals  is  more  nourishing  than  that  of  the  lower.  The  sources 
of  supply  become  more  numerous  and  the  character  of  the  sup- 
ply more  varied  as  the  structural  organization  ascends.  De- 
scending the  scale,  however,  we  find  the  art  of  subsistence 
becoming  more  simple.  The  carnivorous  plants  imprison  food 
within  their  petals  and  assimilate  it  by  a  process  of  absorp- 
tion. If  we  descend  the  scale  of  organization  until  we  reach 
the  vegetable  kingdom,  the  mystery  of  subsistence  vanishes. 


22  DESCRIPTIVE  ECONOMICS. 

Moreover,  the  lower  the  structural  organization  the  greater  the 
dependence.  The  carnivorous  plants  must  take  what  nature 
brings  to  their  mouths.  The  herbivores  are  able  to  forage 
for  themselves  and  decrease  the  chances  of  starvation.  The 
structural  organization  of  the  carnivores,  together  with  the 
character  of  their  food,  fit  them  to  survive  on  a  meal  now  and 
then,  and  periodical  famine  produces  no  great  discomfort.  The 
omnivore  usually  demands  its  daily  bread,  and  it  is  reasonably 
sure  of  a  breakfast,  dinner  and  supper.  The  higher  the  struct- 
ural organization,  therefore,  the  more  stated  must  be  the  sup. 
ply  of  food  and  the  more  nourishing  its  character.  What  is 
true  as  to  structural  organization  is  true  also  as  to  economic 
development.  The  higher  the  economic  state,  the  more  regu- 
lar must  be  the  food  supply.  Domestic  animals  cannot  endure 
hunger  and  thirst  as  long  as  wild  animals  of  the  same  species, 
and  the  greater  the  facility  with  which  food  is  obtained  the 
more  dependent  all  animals  become  upon  a  stated  supply. 

The  American  Indians,  in  their  aboriginal  state,  required 
but  little  food  as  compared  with  the  wants  of  highly  civilized 
men.  They  could  go  without  nourishment  for  astonishing 
periods  and  at  the  same  time  maintain  all  the  appearances  of 
normal  health.  One  full  meal  a  day  was  the  usual  allowance, 
and  if  that  should  fail  it  caused  no  great  inconvenience.  We 
may  say  generally,  therefore,  that  man's  necessary  wants,  so 
far  as  food  is  concerned,  require  a  more  certain  and  regular 
supply  of  a  more  nourishing  quality  than  is  required  by  other 
animals.  The  supply  must  also  be  greater,  more  regular,  and 
of  a  finer  quality  as  his  economic  condition  develops  and  assumes 
a  higher  character.  This  thought  is  further  discussed  in  the 
next  chapter.  One  of  the  purposes  which  descriptive  economics 
has  in  view,  however,  is  to  show  that  men  are  better  nourished, 
clothed  and  sheltered  as  their  economic  condition  progresses, 
and,  therefore,  we  may  expect  iterations  of  the  thought  as  we 
proceed. 

Clothing  and  Shelter. — The  fire  which  is  said  to  be  burn- 
ing within  the  body,  or  the  chemical  action  going  on  there, 
must  ordinarily,  in  the  case  of  man,  be  protected  from  without. 
Few  of  the  lower  animals  require  more  than  the  garb  in  which 


THE  STRUGGLE   OF  LIFE,  S{3 

nature  has  dressed  them.  In  tropical  climates  man  can  get 
along  without  much  artificial  covering.  It  is  "  getting  along," 
however,  not  living.  When  ill  health,  and  disease  come,  arti- 
ficial clothing  and  protection  must  come  with  them.  With- 
out artificial  clothing  and  shelter  we  would  be  obliged  to  live 
in  the  tropics.  Man  appears  to  be  born  for  all  climates,  and 
to  be  endowed  with  the  faculty  of  preserving  his  life  and  health 
in  all  climates  by  supplying  what  nature  has  failed  to  provide 
for  him. 


24  DESCRIPTIVE  ECONOMICS, 

i 

CHAPTER  rV. 

MAN'S  WANTS  AND  THEIR  SATISFACTION. 

Man  Distinguislied.  From  Other  Animals. — The  title  of 
the  last  chapter,  "The  Struggle  of  Life,"  indicated  that  the 
struggle  is  to  a  certain  extent  universal.  The  struggle  for 
food  is  not  only  a  constant  struggle  by  man,  but  also  by  all 
other  animals  and  by  all  animal  life.  Naturalists  have  tried 
many  times  to  construct  a  definition  which  would  distinguish 
man  from  other  animals.  They  used  to  say  that  man  was  the 
reasoning  animal,  but  the  more  they  studied  and  understood 
animal  life,  the  more  they  were  compelled  to  admit  that  some 
animals  seem  to  reason.  Out  of  all  the  traits  and  character- 
istics of  man,  it  is  hard  to  find  one  which  is  not  slightly 
imitated  in  some  degree  by  the  higher  forms  of  the  brute  cre- 
ation. It  would  not  be  strange,  therefore,  if  we  should  find 
among  the  more  intelligent  brutes,  signs  of  a  desire  for  the 
comforts  of  life,  in  addition  to  necessary  wants.  These  desires 
are  not  instinctive,  however.  They  are  the  results  of  an  unnat- 
ural environment  imposed  by  man.  The  lower  animals  have 
no  wants  in  the  sense  that  man  has  wants.  Animal  instinct 
demands  only  necessities.  Man  alone  demands  something  be- 
sides necessities.  The  number  and  character  of  man's  wants 
are  subject  to  indefinite  increase  and  extension.  The  aggregate 
want  of  the  lower  animals  remains  the  same  from  generation  to 
generation.     This  fact  brings  us  to: 

Another  Class  of  Wants. — The  wants  which  were  discussed 
in  the  last  chapter  were  necessary  wants.  The  wants  of  food, 
clothing  and  shelter  which  man  must  have  in  order  to  live  at  all. 
We  come  now  to  a  class  of  wants  which  man  must  have  in  order 
to  live  worthily.  They  are  popularly  denominated  comforts. 
They  are  the  peculiar  wants  of  man,  distinguishing  him  from 
brutes.  Economics  considers  man  in  the  light  of  his  divine 
origin.  It  treats  of  liim  as  having  a  purpose  on  earth  greater  and 
nobler  than  that  of  other  animals.     It  considers  that  he  would 


man's  wants  and  their  satisfaction.  25 

not  accomplish  his  purposes,  if  he  did  not  develop  wants  dis- 
tinguishing him  from  the  beast.  To-day  the  horse  is  a  thing 
of  beauty  and  symmetry.  Its  wants  are  the  same,  no  greater, 
no  less,  than  at  the  time  when  it  was  a  scrawny  digitigrade, 
walking  on  five  fingers  and  toes;  centuries  of  domestication, 
breeding  and  natural  selection  have  not  increased  its  wants. 
During  the  same  time  man's  wants  have  increased  infinitely. 
They  increase  from  age  to  age,  from  one  stage  of  civilization 
to  another.  With  each  successive  stage  of  advancement  they 
become  more  numerous,  more  varied  and  of  a  higher  quality. 
Many  necessities  of  the  present  day  were  the  luxuries  of  our 
grandfathers.  The  tallow  candle  was  once  a  great  comfort. 
The  electric  light  is  a  necessity  of  modern  civilization. 

The  Satisfaction  of  Increasing  Wants. — This  is  the  great 
problem  of  economics.  It  being  conceded  that  man  ought 
to  have  more  wants  than  other  animals,  that  he  ought  to 
want  more  than  the  bare  necessities  of  life;  that  his  wants 
ought  to  keep  growing  in  number  and  quality,  and  that  men 
ought  to  desire  comforts  in  order  to  become  what  they  are  des- 
tined to  become,  then  the  problem  is:  How  shall  these  com- 
forts be  procured  ?  How  shall  these  increasing  wants  be  sat- 
isfied ?  Philanthropists  talk  of  the  poor  growing  poorer. 
They  refer  to  the  difficulty  of  procuring  the  increased  wants 
of  advancing  civilization — of  keeping  pace  with  economic  pro- 
gress. It  is  just  as  easy  for  the  inhabitants  of  Western  New 
York  to  obtain  the  bare  necessities  of  life  as  it  was  for  the 
Senecas.  It  is  easier,  in  fact.  The  necessities  of  life  are  ob- 
tained with  greater  facility  now  than  when  Hudson  sailed  past 
Manhattan  Island.  The  comforts  of  life  are  more  abundant 
and  more  widely  distributed.  Non-satisfaction  of  wants  results 
in  the  condition  which  we  call  poverty.  But  when  the  poor 
grow  poorer,  it  is  not  because  of  the  non-satisfaction  of  neces- 
sary wants.  It  is  because  they  fail  to  procure  the  comforts 
which  others  enjoy.  It  is  relative  poverty  rather  than  absolute 
poverty. 

Increasing  wants  are  satisfied  and  the  comforts  of  advancing 
civilization  are  procured  by  means  of  the  organism  which  is 
called  Industrial  Society.     It  is  that  ** harmonious  system" 


26  DESCRIPTIVE  ECONOMICS. 

which  brings  our  wants  from  all  parts  of  the  world;  which  pro- 
duces them  here  and  there,  in  all  parts  of  the  earth,  and  dis- 
tributes them  from  hand  to  hand.  To  know  what  that  har- 
monious system  is;  how  it  has  grown  with  the  growth  of  popu- 
lation; how  it  has  adapted  itself  to  the  changes  and  exigencies 
of  growing  civilization  is  part  of  the  work  in  hand.  We 
shall  see  as  we  proceed  that  as  civilization  advances  men 
forsake  the  partially  isolated  economic  life,  characteristic  of 
very  primitive  peoples,  and  work  together.  They  find  it  to 
their  advantage  to  cooperate  in  the  work  of  satisfying  their 
wants.  This  cooperation  becomes  the  system  which  was  re- 
ferred to  in  the  paragraph  on  Industrial  Society,  in  chapter 
one.  In  proportion  as  wants  become  more  numerous  and  higher 
in  character,  the  more  necessary  it  is  for  men  to  depend  upon 
this  organism  of  industrial  society  for  their  satisfaction.  At 
the  beginning  of  our  study  we  cannot  over-rate  the  importance 
of  industrial  cooperation  as  a  factor  in  economics.  Not  indus- 
trial cooperation  in  some  specific  undertaking,  by  particular 
individuals  of  a  local  community,  but  industrial  cooperation  of 
mankind  in  general — of  the  race.  It  is  that  cooperation  of  the 
clock  makers  of  the  Black  Forest,  and  the  wheat  growers  of 
Dakota,  and  the  coffee  planters  of  Honduras,  who  work  together 
each  according  to  his  special  economic  advantages  and  condi- 
tions, for  the  satisfaction  of  the  aggregate  want. 

The  Comforts  of  Food,  Clothing  and  Shelter. — In  look- 
ing around  to  see  what  we  have  and  use  at  the  present  time, 
we  find  that  nearly  everything  is  an  improvement  simply,  upon 
the  original  necessary  wants  of  food,  clothing  and  shelter. 
We  want  now  a  greater  variety  of  food  than  the  savage  man. 
We  want  variety  in  the  cooking  of  it,  and  we  want  it  better  in 
quality.  The  innumerable  varieties  and  delicacies  of  modern 
food  aim  at  the  satisfaction  of  these  increased  wants.  The 
same  thing  is  true  with  regard  to  the  comforts  of  clothing  and 
shelter.  The  clothing  of  the  Fuegian  consists  of  a  bit  of  seal 
skin  hung  by  a  string  from  the  neck.  It  is  shifted  about  ac- 
cording to  the  direction  of  the  blast,  so  that  only  the  windward 
side  of  the  man  is  protected.  His  hut  is  of  the  same  character. 
It  is  simply  a  temporary  shelter,  sufficient  for  the  hour.     It 


man's  wants  and  their  satisfaction.  27 

has  no  stated  entrance.  He  goes  in  on  the  leeward  side  and 
closes  up  the  gaps  to  windward.  His  sole  aim  in  life  is  to  sat- 
isfy the  purely  animal  wants,  those  which  will  preserve  and 
prolong  existence.  The  wants  of  the  higher  stages  of  industrial 
society  demand  something  more  than  the  necessaries  of  life. 
They  demand  roast  capon;  terrapin;  broad  cloth;  furs;  houses 
of  many  rooms,  and  many  gables,  comfortably  appointed.  All 
through  the  ages,  from  historic  times,  the  number  of  man's 
wants,  their  character  and  quality,  have  been  the  thermometer 
of  his  progress.  They  have  indicated  the  stage  of  indastrial 
society  and  measured  the  diffusion  of  human  culture. 

Therefore,  in  all  ages  and  at  all  times,  the  struggle  of  man- 
kind has  been  and  is,  to  satisfy,  (1)  necessary  wants;  (2)  wants 
of  comfort.  The  means  which  men  adopt  to  satisfy  the  wants 
of  both  classes;  the  persistence  with  which  they  seek  to  satisfy 
the  wants  of  the  second  class,  and  the  extent  to  which  they 
succeed,  is  the  measure  of  their  separation  from  the  lower  ani- 
mals. Well  meaning  people  sometimes  say  we  must  learn  to 
be  content, — that  we  must  set  a  limit  to  our  wants  and  not  be 
striving  for  something  more.  They  quote  Paul's  words:  '*For 
I  have  learned  in  whatsoever  state  I  am,  therewith  to  be  con- 
tent," just  as  though  Paul  meant  to  say  that  it  is  wrong  to 
make  our  state  as  comfortable  and  as  satisfactory  as  possible. 
Perhaps  we  should  not  want  more  than  it  is  in  our  power  to 
properly  satisfy,  but  the  real  benefit  arising  from  the  existence 
of  wants  lies  in  the  fact  that  it  sets  us  to  work  satisfying  them. 
Life  is  enlarged  and  economic  activity  extended.  Our  eco- 
nomic capacities  are  developed  by  our  trying  to  keep  pace  with 
increasing  wants. 

We  have  now  finished  the  four  introductory  chapters  de- 
signed to  give  a  general  view  of  the  purposes  of  our  study.  We 
are  now  in  position  to  better  understand  those  purposes.  It  is 
not  necessary  to  make  another  definition  of  economics,  nor  need 
we  enlarge  upon  the  definition  already  attempted.  The  pro- 
gress of  the  work  will  be  an  unfolding  and  an  enlargement. 
We  may  profitably  reiterate,  however.  In  some  studies  itera- 
tion is  always  profitable.  We  shall  find  that  to  be  particularly 
true  of  the  study  of  descriptive  economics.    We  shall  find  occa- 


28  DESCRIPTIVE  ECONOMICS. 

sion,  therefore,  in  our  progress,  to  reiterate  designedly  and  for 
the  purpose  of  obtaining  clear  conceptions.  In  chapter  one, 
economics  was  defined  as  the  study  of  men  in  their  relations  to 
industrial  society.  At  the  end  of  the  same  chapter  it  was  said 
that  the  ultimate  aim  of  economic  study  is  to  show  how  men 
get  a  living  in  the  various  stages  of  industrial  society,  and  how 
their  membership  in  industrial  society  conditions  them  in  the 
struggle.  A  reiteration  of  the  same  thought,  in  slightly  dif- 
erent  language,  would  read  like  this:  *'  Economics  inquires  how 
the  various  wants  of  the  people  of  a  country,  especially  the 
wants  of  food,  clothing,  fuel,  shelter,  may  be  satisfied;  how  the 
satisfaction  of  these  wants  influences  the  aggregate  industrial 
life,  and  how  in  turn  they  are  influenced  by  the  industrial  life." 
We  are  now  ready  to  commence  that  inq^uiry. 


PART  I. 


EOOI^OMIOS  OF  THE  FAMILY. 


CHAPTER  I. 


THE   BEGINNING  OF   INDUSTRIAL   SOCIETY. 

Gregariousness. — Very  few  members  of  the  animal  king- 
dom live  strictly  isolated  lives.  The  rapacious  animals  usually 
lurk  alone  in  forest  and  jungle,  although  some  fellows  of  their 
kind  are  frequently  found  not  far  away.  The  lower  forms 
of  animal  life,  endowed  with  but  little  sensation,  drag  out  a 
miserable,  solitary  existence.  The  higher  forms,  although  not 
classed  among  the  gregarious  animals,  rarely  live  entirely  alone. 
Solitary  life  is  but  for  short  periods  at  the  most.  Union  and 
association  with  their  fellows  come  sooner  or  later.  Isolation 
is  the  exception;  gregarious  life  is  the  rule.  The  hoofed  animals 
are  seldom  found  alone.  The  carnivores  are  less  gregarious 
than  the  herbivores.  The  hunter  who  finds  one  squirrel  in  a 
piece  of  timber  is  sure  that  another  squirrel  is  not  far  oflf. 
When  Aristotle  wrote  that  man  is  a  social  animal,  it  was  one 
way  of  expressing  the  fact  that  man  lives  gregariously,  and  is  to 
be  classed  among  the  gregarious  animals. 

Family  Ijife  among  Animals. — Naturalists  profess  to  have 
discovered  among  animals  indications  of  the  existence  of  the 
institution  of  the  family.  The  signs  may  be  slight,  but  at 
least  they  are  far  off  prophecies  of  the  condition  of  things  which 
we  may  expect  to  find  among  men.  There  is  the  love  of  mates, 
almost  universal  in  its  existence.  We  find  animals  entering 
into  relations  of  mutual  helpfulness,  rendering  mutual  aid  to 
each  other  and  their  offspring,  rearing  and  breeding  with  all 

39 


30  DESCRIPTIVE  ECONOMICS. 

the  tender  solicitude  of  humanity.  If  you  have  watched  the 
selfsame  robins,  nesting  year  after  year  in  the  same  old  spot 
beneath  the  porch,  and  year  after  year  exhibiting  the  same 
touching  anxiety  for  the  welfare  of  their  young,  you  have  seen 
signs  of  the  family  life.  A  little  Closer  attention  and  study 
show  that  "the  sociality  and  helpfulness  of  animals  are  flowers 
whose  roots  are  in  kinship." 

Industrial  Society  of  Animals. — By  living  gregariously, 
animals  advance  their  material  interests  in  two  ways.  In  the 
first  place  their  association  becomes  a  combination  for  purposes 
of  defense.  In  the  second  place  their  gregarious  association  is 
an  advantage  in  procuring  subsistence.  In  all  cases  of  animal 
sociality  they  seem  to  get  some  good  out  of  society  and  associ- 
ation. Association  for  defense  is  the  more  primitive  and  the 
more  widespread.  Cliff  swallows  enter  into  combination  and 
render  mutual  assistance  in  warding  off  intruders.  King  birds 
unite  in  defending  their  nests  against  crows.  The  herbivores 
associate  in  defending  themselves  against  carnivores.  Many 
of  the  hoofed  animals,  naturally  of  a  timid  disposition,  would 
be  practically  defenseless  against  the  attacks  of  rapacious  ani- 
mals, did  they  not  exercise  mutual  helpfulness.  A  herd  of 
deer  will  frequently  ward  off  the  attack  of  a  whole  pack  of 
wolves.  Association  for  the  purpose  of  procuring  subsistence 
is  perhaps  a  little  higher  type  of  animal  society  than  association 
for  defense.  In  its  most  primitive  form  it  is  simply  association 
and  combination  in  attacking  or  hunting  prey.  In  this  form 
it  is  represented  by  the  pack  hunting  animals;  by  vultures, 
kites  and  some  eagles,  which  unite  in  pursuing  their  quarry; 
by  pelicans  which  form  a  semi-circle  at  the  sea  shore  and  grad- 
ually advance  the  circle  to  the  beach,  driving  the  fish  before 
them.  Then  comes  association  in  which  there  seems  to  be  a 
mutuality  of  labor  beyond  that  involved  in  mere  combination 
for  attack.  Himadryad  baboons  have  been  known  to  unite  to 
turn  over  large  stones  and  divide  the  spoils  found  beneath  them. 
Beavers,  bees  and  ants  live  in  a  fairly  well  organized  industrial 
society,  sharing  all  the  labors  connected  with  getting  a  living. 
The  ants  are  said  to  take  their  turn  in  going  up  the  trees  *'to 
milk  their  cows."    The  reference  is  to  their  habit  of  procuring 


THE  BEOTNNING    OF  INDUSTRIAL   SOCIETY.  31 

subsistence  from  the  Aphides,  as  related  by  Linneus.  They 
tickle  the  Aphides  with  their  antennae  and  the  resulting  irrita- 
tion causes  an  exudation  from  the  pores  upon  which  the  ants 
feed.  The  colony  forming  animals  perfectly  illustrate  the 
essence  of  industrial  society.  They  illustrate  its  progress  as 
association  for  attack  and  defense  illustrates  its  beginning. 

The  Human  Family. — We  have  seen  what  has  been  called 
its  far-off  prophecies.  That  which  is  found  to  exist  in  a  crude 
state,  with  crude  relations,  among  the  lower  animals,  we  would 
naturally  expect  to  exist  in  a  more  sublime  form  with  higher 
relations  and  affections  among  men.  In  man  the  attraction  of 
mates  is  deepened  into  love,  and  he  is  bom  into  the  family. 
That  is  his  condition  without  his  assent.  Geologists  and  eth- 
nologists dig  into  the  earth  and  tell  us  that  they  find  evidence 
of  a  time  when  man  was  a  solitary  brute,  living  alone  in  caves. 
But  that  time  is  prehistoric.  History  and  the  remotest  explor- 
ations of  travelers  tell  us  of  no  such  time  and  no  such  men. 
Men  are  everywhere  found  living  in  the  family,  and  society  has 
everywhere  been  found  far  enough  advanced  to  embrace  the 
family  as  one  of  its  institutions.  It  is  certainly  not  necessary 
for  our  present  purposes  to  study  the  state  of  things  prior  to 
the  institution  of  the  family. 

And  even  those  prehistoric  men  must  have  felt  the  desire 
for  mutual  relationships,  and  practiced  the  sociality  existing 
among  the  lower  animals.  The  relations  and  affections  of  social 
life  must  certainly  have  assisted  in  the  struggle  for  material 
subsistence.  They  must  have  lessened  the  intensity  of  the 
struggle  and  ennobled  its  character,  because  they  guaranteed 
existence  and  progress.  The  struggle  itself  must  have  attained 
higher  conditions  and  reached  the  real  affection  of  kinship. 
Then,  too,  we  can  hardly  conceive  of  a  time  when  men  did  not 
know  that  they  were  social  animals.  It  is  knowledge  of  their 
nature  which  distinguishes  them  from  other  animals.  Our 
study,  therefore,  commences  with  society,  and  man  in  society. 
It  begins  with  the  family  as  the  earliest  and  most  primitive 
form  of  society,  and  regards  man  as  a  member  of  the  family  and 
a  member  of  society.  It  regards  the  family  as  the  very  begin- 
ning of  industrial  society,  and  as  that  form  of  industrial  society 


32  DESCRIPTIVE  ECONOMICS. 

which  has  existed  everywhere  and  among  all  men  at  some  time, 
and  through  which  all  peoples  have  passed.  The  machinery 
whereby  economic  wants  are  supplied  to  individuals  is  first  set 
in  motion  in  the  family  itself.  The  machinery  is  operated  by 
the  members  of  the  family,  independent  of  all  other  families 
and  individuals. 

The  Isolated  Family. — Dr.  Kane,  the  Arctic  explorer,  tells 
in  his  journal  how  Hans  and  Morton,  two  of  his  lieutenants, 
went  out  from  the  ice-bound  brig  on  an  exploring  expedition. 
When  about  seventy-five  miles  from  the  ship  they  found  two 
huts  contaming  two  families.  The  spot  was  thousands  of 
miles  from  civilization,  and  from  a  stated  source  of  supplies. 
The  frost-bitten  travelers  were  taken  in  and  treated  to  the 
comforts  of  home.  Everything  was  home-made.  The  simple 
utensils  with  which  the  huts  had  been  built,  whereby  they 
were  warmed,  and  with  which  the  daily  food  was  prepared,  and 
the  food  itself,  had  its  origin  in  the  labor  of  each  family. 
Each  family  was  sufficient  unto  itself.  Each  provided  itself 
with  all  the  wants  of  life.  It  is  true  that  these  wants  were  few 
and  simple.  They  were  necessarily  so.  Each  family  was  its 
own  carpenter  and  builder,  tanner  and  leather  worker,  hunter 
and  fisher,  sleigh-maker  and  cook,  and  the  productions  of  the 
family  labor  must  necessarily,  therefore,  be  crude  and  simple. 
The  study  of  family  activities  as  illustrated  by  such  examples; 
the  study  of  means  and  methods  by  which  an  economically 
isolated  family  provides  itself  with  food,  clothing  and  shelter, 
is  the  beginning  of  the  study  of  economics.  It  is  not  often 
that  families  are  found  in  a  more  isolated  state  than  those 
discovered  by  Dr.  Kane's  men.  Among  the  rudest  people  dis- 
covered by  travelers  or  described  by  ethnologists,  it  is  found 
that  families  congregate.  It  is  not  a  normal  condition  of 
things  when  a  family  goes  off  into  the  forest  or  waste  and  lives 
by  itself.  The  fact  that  two  or  more  families  live  in  the  same 
neighborhood,  however,  does  not  preclude  the  idea  of  economic 
isolation — the  state  in  which  each  family  produces  all  its  wants, 
by  the  labor  of  the  members  of  its  immediate  circle.  Eco- 
nomics of  the  family  relates  to  the  getting  of  a  living  by  an 
isolated  family. 


THE  DEGTNNINO    OF  INDUSTRIAL   SOCIETY.  33 

Territorial  and  Economic  Isolation.  —  Care  must  be 
taken  to  distinguish  mere  territorial  isolation  from  economic 
isolation.  When  the  isolated  family  is  referred  to  as  the 
beginning  of  industrial  society,  it  is  the  economically  iso- 
lated family  which  is  meant,  and  not  the  territorially  isolated 
family.  There  is  a  certain  territorial  isolation  about  all  pio- 
neer life.  There  may  also  be  a  partial  economic  isolation. 
Let  us  illustrate:  When  a  pioneer  walked  from  the  head 
of  navigation  on  the  Hudson  up  through  the  valley  of  the  Mo- 
hawk into  the  far  Genesee  country  with  a  pack  slung  from  his 
axe  handle,  and  cut  down  some  of  the  huge  sugar  maples  and 
beeches,  making  room  for  a  log  cabin,  he  became  territorially 
isolated.  His  nearest  neighbor  rarely  heard  his  rifle-crack. 
There  was  a  partial  economic  isolation  also.  His  own  labor, 
united  with  that  of  his  help-mate,  produced  nearly  all  the  fam- 
ily wants — fish  from  the  river,  game  from  the  woods,  the  prod- 
uct of  the  first  little  garden  patch  which  was  cleared.  He  tanned 
deer  skins  for  various  articles  of  clothing,  and  later  on  spun 
wool  from  the  sheep,  or  flax  from  the  field.  And  so  we  might 
go  on  naming  the  wants  which  he  supplied  by  his  own  exertions 
without  calling  upon  the  outside  world.  So  it  has  been  from 
the  time  of  the  Pilgrim  Fathers  to  the  time  when  their  children 
pushed  out  west  and  north,  and  their  children's  children  built 
cabins  in  the  forests  and  on  the  plains  of  the  great  West. 
Theirs  was  a  territorial  isolation.  At  the  most  it  was  only  a  par- 
tial economic  isolation.  If  we  compare  it  with  the  condition  of 
things  at  the  beginning  of  industrial  society  it  was  a  very  slight 
economic  isolation  indeed.  Our  pioneer  ancestors  brought  with 
them  their  axes  and  their  clothing.  These  were  the  visible  signs 
of  an  advanced  economic  life  and  a  highly  developed  industrial 
society  which  existed  elsewhere,  and  which  they  had  left  behind. 
These  things,  moreover,  exerted  but  a  slight  effect  toward  re- 
ducing their  economic  isolation  compared  with  the  effect  of  all 
the  arts  of  life  which  they  brought  with  them.  They  brought 
from '  the  economic  life  which  they  left  behind  knowledge  of 
fire,  of  the  use  and  construction  of  tools,  of  the  various  pro- 
cesses of  tillage  and  the  cultivation  of  plants  and  seeds,  of  the 
domestication  of  animals,  of  improved  methods  of  taking  fish 
3 


34  DESCRIPTIVE  ECONOMICS. 

and  the  wild  animals,  of  weaving  and  building,  and  mining  and 
pottery  making.  The  real  economic  isolation  and  the  real  be- 
ginning of  industrial  society  commences  with  the  discovery  of 
the  very  earliest  of  these  arts  of  life — with  the  families  which 
began  tlieir  practice  after  a  rude  fashion.  Industrial  society 
grows  with  the  development  of  these  arts,  and  it  is  a  very  slow 
growth.  From  the  discovery  of  one  art  to  the  discovery  of  the 
next  means,  frequently,  the  lapse  of  ages. 


THE  FRUIT  AND  NUT  GATHERER,  35 


CHAPTER  II. 

THE  FRUIT  AND  NUT  GATHERER. 

Food  Resources  of  the  Family  Stage. — Bearing  in  mind 
that  we  are  now  studying  that  period  of  industrial  society  when 
the  isolated  family  is  its  unit  and  its  highest  development,  our 
first  inquiry  naturally  relates  to  the  sources  of  food  supply. 
These  sources  must  necessarily  be  restricted  and  limited.  There 
is  no  cooperation  among  men,  outside  of  the  membership  of 
each  immediate  family  circle.  All  the  necessities  of  the  family 
must  be  supplied  by  the  labor  of  its  own  members.  Each  man 
is  a  ''jack  of  all  trades,"  good  at  none  and  having  but  little 
time  for  any.  It  is  a  state  of  savagery  in  which  men  have  not 
the  means  of  systematically  engaging  in  the  production  of  food. 
They  must  dispute  with  the  wild  beasts  for  possession  of  the 
woods  and  common  feeding  grounds.  During  the  family  stage 
of  industrial  society  we  find  three  principal  sources  of  food. 
This  chapter  will  describe  briefly  the  first  and  most  primitive 
method  of  getting  a  living.  It  belongs  to  the  earliest  and  most 
primitive  stage  of  isolated  family  life.  We  will  afterward  pro- 
ceed to  ascertain  the  progressive  methods  of  enlarging  the 
sources  of  subsistence.  "  The  great  epochs  of  human  progress 
have  been  identified,  more  or  less  directly,  with  the  enlarge- 
ment of  the  sources  of  subsistence."  This  is  a  fact  of  such 
pronounced  importance  that  much  attention  must  be  given  to 
it.  A  large  part  of  the  discussion  in  descriptive  economics  is 
properly  devoted  to  it. 

The  Frugiferous  Suhsistence. — Men  were  first  of  all  fruit 
and  nut  gatherers.  They  were  like  the  wild  animals,  living  on 
the  spontaneous  fruits  of  the  earth.  It  was  a  precarious  sub- 
sistence upon  berries,  wild  fruits  and  nuts,  such  as  the  bounty 
of  nature  afforded.  It  was  a  more  bitter  struggle  for  existence 
than  we  can  now  comprehend.  Each  member  of  the  family, 
must  necessarily  have  entered  into  it.  The  young  as  well  as 
the  old  took  a  part,  just  as  the  young  of  animals  are  turned 
adrift  to  seek  a  living. 


36  DESCRIPTIVE  ECONOMICS. 

A  Prehistoric  State. — Few,  if  any,  evidences  of  peoples  in 
this  state  have  been  found  within  historic  times.  The  savage 
races  discovered  by  travelers  have  usually  passed  to  a  higher  eco- 
nomic plane.  The  structural  organization  of  men  is  omnivorous, 
and  the  strictly  frugiferous  subsistence  is  unnatural.  Several 
tribes  of  savages  exist,  however,  which  nearly  approach  the  con- 
dition of  frugiferous  subsistence.  A  French  traveler,  M.  Chaf- 
faujou,  discovered  near  the  sources  of  the  Orinoco  a  tribe  of  Gua- 
haribo  Indians  whom  he  described  as  living  without  clothing, 
houses  or  tents,  ''feeding  on  large  worms  which  they  scraped 
up  with  their  nails,  and  on  seeds  and  palm  shoots  which  they 
severed  with  their  teeth."  There  are  savages  roaming  the  virgin 
forests  of  Central  Borneo  much  after  the  manner  of  wild  ani- 
mals. "At  night  they  take  shelter  under  some  large  tree  where 
they  light  a  fire  to  keep  off  the  wild  beasts;  the  children  are 
hung  up  amongst  the  branches."  The  Curumbus  of  the  Neil- 
gherry  Hills,  one  of  the  hill  tribes  of  India,  are  described  as 
living  mainly  on  such  vegetable  subsistence  as  nature  throws  in 
their  way,  and  lacking  sufficient  skill  and  intelligence  to  pro- 
cure anything  else. 

A  Restricted  Habitat. — The  portion  of  the  earth's  surface 
which  could  be  occupied  by  men  subsisting  in  this  way  is  neces- 
sarily small.  Only  a  tropical  climate  and  a  country  richly  en- 
dowed with  vegetable  life  would  admit  of  it.  The  body  is 
usually  deformed,  and  the  period  of  life  is  short  owing  to  the 
ravages  of  disease.  Were  it  not  so,  death  must  come  in  the 
more  horrible  form  of  starvation.  There  must  necessarily  in 
all  climates  be  periods  when  spontaneous  fruits  are  scarce, 
and  at  such  times  the  edible  roots  which  can  be  procured,  with 
plants  and  fungi  thrown  in,  will  barely  provide  sufficient  nour- 
ishment to  sustain  life.  As  population  grows,  the  supply  will 
fall  short.  There  are  many  savage  tribes  of  the  present  day, 
however,  who  are  at  times  obliged  to  resort  to  this  subsistence. 
"When  animal  food  fails,  Fuegians  and  some  American  Indians 
are  glad  to  resort  to  berries,  bark  and  bulbs. 


THE  FISHER  AND  HUNTER.  37 


CHAPTER  III. 

THE  FISHER  AND  HUNTER. 

The  Second  Economic  State. — We  have  just  seen  that  in 
relation  to  subsistence,  the  first  economic  state  of  mankind  is 
one  in  which  sole  reliance  is  placed  upon  the  spontaneous  pro- 
ducts of  nature.  It  is  a  natural  subsistence  upon  fruits  and 
nuts.  Men  starved  on  its  parsimony,  or  feasted  on  its  bounty, 
as  the  case  might  be.  This  is  the  first  stage  of  industrial 
society  in  so  far  as  the  source  of  subsistence  and  the  means  of 
procuring  it  are  concerned.  In  the  second  economic  state  men 
are  not  wholly  dependent  upon  the  fickleness  of  nature.  They 
have  gained  some  slight  conquest  over  it  and  have  learned  to 
use  some  skill  and  some  force  in  procuring  what  is  not  spon- 
taneously brought  to  hand.  It  is  the  fisher  and  hunter  state 
and  represents  that  stage  of  industrial  society  in  which  men 
have  added  to  their  food  resources,  the  products  of  the  chase. 
They  still  use  the  spontaneous  fruits  of  nature,  as  in  the  first 
state,  but  now  they  add  to  them,  by  the  use  of  skill  and  force, 
and  the  larder  is  increased  accordingly.  The  idea  of  conscious 
labor  commences  to  play  a  part  in  daily  life. 

The  Fisher  First. — It  is  of  no  sort  of  consequence  whether 
men  first  enhanced  their  material  welfare  and  enlarged  the 
sources  of  subsistence,  by  fishing  or  by  hunting.  In  some  places 
perhaps  the  art  of  hunting  was  first  practiced,  and  in  other  places 
it  was  the  art  of  fishing.  The  seas  and  rivers,  however,  were  the 
"first  avenues  for  the  progress  of  civilization  and  industry" 
and  the  early  centers  of  popl^lation  were  about  the  sea  shores. 
It  is  a  natural  conjecture  that  shell  fish  were  largely  a  source 
of  subsistence  before  land  game  became  a  factor  in  getting  a 
living.  Kitchen  middens,  or  shell  mounds  are  found  along  all 
the  coasts  of  the  world.  They  are  also  found  in  the  interior  of 
the  continents  along  the  shores  of  the  prehistoric  inland  seas. 
Shells  are  frequently  found,  along  with  the  remains  of  prehis- 
toric man.     The  shell  fish  is  easy  of  capture,  and  in  primitive 


38  DESCRIPTIVE  ECONOMICS. 

times  was  abundant  in  quantity.  But  little  skill  was  required 
to  procure  this  form  of  subsistence.  Shell  fishing  does  not  re- 
quire the  exercise  of  the  hunter's  craft,  and  it  is  not  difficult 
to  understand  that  primitive  men  were  first  attracted  to  it  when 
fruits  and  nuts  failed.  It  is  still  the  principal  source  of  subsist- 
ence of  the  Fuegians  and  also  of  some  of  the  Australian  tribes. 

Small  and  Large  Game. — The  true  hunter  state  doubtless 
began  with  the  conquest  of  small  game,  such  as  birds  and  the 
smaller  mammals.  The  club  which  was  used  to  knock  down 
nuts  from  the  tree  could  easily  have  been  used  to  knock  down 
a  bird,  although  it  may  have  taken  ages  for  primitive  man  to 
attain  to  the  second  occupation  from  the  first.  The  capture 
of  large  game  presupposes  quite  a  victory  over  the  forces  of 
nature.  It  is  the  result  of  years  of  effort.  The  hunter  must 
know  the  habits  of  his  game,  the  species  of  food  which  it  de- 
sires, its  feeding  grounds  and  all  its  characteristics.  To  acquire 
this  knowledge  required  patient  observation  of  the  ways  and 
means  adopted  by  the  carnivorous  and  rapacious  animals  in 
their  pursuit  of  the  art  of  hunting. 

Greater  Certainty  of  the  Hunter's  Subsistence. — The 
subsistence  of  the  hunter  is  much  more  stated  and  sure  than 
that  of  the  fruit  and  nut  gatherer.  The  hunter  state  is  a 
marked  economic  step  in  advance  of  the  frugiferous  state. 
The  hunter  while  following  his  avocation  can  procure  frugi- 
ferous subsistence  also.  His  game  goes  to  make  up  the  entries 
and  extras  of  his  bill  of  fare,  and  between  them  starvation  is 
less  likely  to  occur.  His  subsistence,  moreover,  is  not  only 
more  stated  and  varied,  but  more  nourishing.  Physical  endur- 
ance is  increased,  and  the  physique  is  developed. 

Enlargement  of  Habitat. — The  fruit  and  nut  gatherer  re- 
lying wholly  upon  a  natural  subsistence  of  fruits  and  nuts,  to 
be  had  for  the  gathering,  was  limited  as  to  the  place  of  his 
habitation,  by  climate  and  physical  environment.  He  could 
not  live  in  the  temperate  or  northern  climates,  but  must  con- 
fine himself  to  tropical  zones  where  nature  is  prodigal.  But 
when  he  had  acquired  the  art  of  hunting  and  fishing,  the  ter- 
ritory over  which  he  could  roam  and  find  a  living  was  greatly 
enlarged.     He  could  follow  the  seas  and  rivers  where  he  would 


THE  FISHER   AND  HUNTER.  39 

always  be  near  the  fish.  He  could  go  wherever  game  abounded, 
although  fruit  and  vegetables  suitable  for  consumption  might 
be  scarce.  The  winter  season  especially  was  robbed  of  some  of 
the  terrors  which  characterize  it  when  the  source  of  subsistence 
is  frugiferous. 

Recurring  Famines. — Notwithstanding  the  decided  better- 
ment of  the  condition  of  mankind  upon  entering  the  hunter 
and  fisher  state,  there  is  oft  and  constantly  recurring  famine. 
There  are  times  when  game  and  other  food  fail.  Dr.  Kane's 
description  of  the  result  of  a  famine  at  Etah  is  an  illustration. 
Instead  of  "  plump,  greasy  children,  and  round  cheeked  mat- 
rons," the  explorer  saw  *'lean  figures  of  misery"  and  men  who 
looked  hard  and  bony.  In  the  whole  community  there  was 
only  the  skin  of  a  young  sea  unicorn  left.  All  the  dogs  but 
four  had  been  eaten.  There  were  no  lights,  for  the  blubber 
had  been  used.  Those  who  know  it  best,  know  that  the  hunter 
state  is  a  struggle  for  food  of  the  keenest  kind.  Often  a  squirrel 
or  bird  will  answer  to  "qualify  or  season  a  gallon  of  soup." 
The  Indian  hunter,  in  order  to  provide  sustenance  for  himself 
and  family,  arose  at  daybreak  and  tramped  the  forest  until 
dusk.  If  he  was  unsuccessful  he  returned  to  his  couch  of  cedar 
branches  and  rush  mats,  only  to  rise  at  dawn  and  commence 
the  weary  tramp  again.  Instances  are  related  where  the  head 
of  the  Indian  family  has  patiently  hunted  day  after  day  until 
he  has  fallen  in  the  forest  and  died  of  starvation.  He  dreams 
of  the  happy  hunting  ground  because  there  he  will  no  longer 
know  the  acute  pangs  of  hunger.  The  missionary  Lejeune, 
sitting  around  a  camp-fire  on  the  present  site  of  Montreal, 
heard  an  Indian  legend  about  a  young  brave  who  climbed  a 
great  tree  and  went  hunting  in  Heaven.  The  legend  illus- 
trates the  state  of  the  hunter  mind  stamped  with  the  impress 
of  chronic  hunger. 


40  DESCRIPTIVE  ECONOMICS. 


CHAPTER  VII. 


THE    HERDSMAN. 


Animal  Domestication. — Following  the  hunter  and  fisher 
state,  the  next  great  movement  in  the  economic  progress  of 
mankind  relates  to  the  domestication  of  animals.  It  is  quite  a 
step  in  advance  when  men  pass  out  of  the  frugiferous  into  the 
hunting  and  fishing  state,  but  the  economic  transition  involved 
is  not  as  important  as  that  connected  with  the  advance  from 
the  hunter  state  to  the  pastoral  state. 

The  Shepherding  of  Animals. — Reference  has  already  been 
made  to  the  practice  of  the  ant  of  procuring  subsistence  from 
the  Aphides.  According  to  the  naturalist  Espinas,  the  industry 
of  the  ants  amounts  almost  to  the  systematic  breeding  of  the 
Aphis.  The  Aphides  are  either  coaxed  or  forced  into  the 
nests  of  the  ants  where  they  are  fed  and  sheltered,  and  where 
they  lay  their  eggs.  The  ants  take  care  of  the  eggs,  licking 
them  as  tenderly  as  they  do  those  of  their  own  kind.  We  are 
not  to  assume  that  animal  industries  of  this  kind,  or  of  the 
character  referred  to  in  previous  chapters,  are  on  a  footing  with 
human  industries.  They  simply  furnish  food  for  thought,  and 
while  much  animal  industry  may  be,  and  probably  is,  the  result 
of  instinct  and  not  of  forethought  and  consciousness,  yet  we 
may  expect  to  find  in  it  the  prototype  of  human  industry,  or, 
as  we  have  already  called  it,  the  far-off  prophecy  of  economic 
conditions  existing  among  mankind. 

The  Beginning  of  Animal  Domestication. — The  hunter 
slays  the  dam  and  spares  the  offspring.  At  first  the  young  one 
may  be  saved  and  reared,  more  as  a  pet  and  companion, 
than  for  any  material  use.  It  is  not  likely  that  the  idea  of 
advancing  material  welfare  by  domesticating  animals  came  into 
the  minds  of  primitive  men  until  long  after  domestication  be- 
came an  accomplished  fact.  The  first  economic  use  of  animals 
doubtless  related  to  assistance  in  hunting.  That  being  the 
chief  avocation  of  the  time,  any  new  art  or  discovery  would 
likely  refer  to  it.     Some  of  the  Australian  tribes,  when  first 


THE  HERDSMAN.  41 

described,  had  tamed  the  wild  dogs  of  the  country  and  trained 
them  to  assist  in  the  chase.  The  American  Indians  at  the  time 
of  the  discovery  had  their  hunting  dogs.  Travelers  who  have 
visited  the  Fuegians  have  found  it  worthy  of  remark  that  the 
people  use  a  race  of  dogs  trained  to  dive  in  the  water  and  catch 
fish.  The  Tartars  have  taught  the  falcon  to  hover  over  the 
heads  of  the  wild  horses  of  the  Steppes,  and  by  fluttering  their 
wings  in  the  eyes  so  confuse  the  poor  brutes  as  to  allow  of  the 
hunter's  approach.  These  illustrations  serve  to  show  how  suc- 
cess in  the  chase  is  greatly  enhanced  when  the  hunter  has  called 
the  brute  creation  to  his  aid.  His  labor  becomes  more  efficient 
and  the  hunting  ground  more  productive. 

Domestication  for  Food. — Having  once  acquired  the  art 
of  domesticating  animals  for  their  assistance  in  the  chase,  it 
would  not  be  a  great  step  in  advance  when  men  domesticate 
them  for  food.  The  idea  would  be  suggested  if  it  were  found 
when  famine  has  come  upon  the  hunter  family,  that  the  brutes 
which  had  been  trained  to  help  in  the  hunt  would  answer  to 
prevent  starvation.  The  dogs  of  the  Fuegians  are  a  last  re- 
source, and  so  it  is  with  the  Esquimaux. 

Domestication  for  Transportation  and  Travel.  —  The 
idea  of  domesticating  the  wild  animal  for  the  purpose  of  utiliz- 
ing its  physical  powers  in  daily  labor  would  dawn  very  slowly. 
It  would  doubtless  not  take  shape  until  ages  after  men  had 
domesticated  animals  for  the  chase.  This  stage  of  domestica- 
tion has  recently  been  reached  in  Siberia.  The  reindeer  is 
found  there  both  in  the  wild  and  in  the  domestic  state.  The 
Laps  and  Siberian  tribes  both  hunt  and  train  it.  It  furnishes 
food,  clothing  and  shelter.  It  afibrds  the  only  means  of  trans- 
portation and  communication  between  various  parts  of  the 
country,  and  without  it,  life  would  be  almost  impossible  in 
portions  of  northern  Siberia.  It  is  the  sole  source  of  subsist- 
ence of  the  northern  tribes,  as  the  Tungas,  supplying  all  their 
necessary  economic  wants.  These  people  are  living  examples 
of  the  economic  condition  of  man  when  he  is  both  hunter  and 
herdsman.  They  are  in  the  reindeer  age.  When  New  England 
was  still  coated  with  the  ice  of  the  glacial  epoch,  its  inhabitants 
were  iu  the  reindeer  age.    A  higher  kind  of  pastoral  life,  and 


42  DESCRIPTIVE  ECONOMICS. 

one  which  is  a  notch  higher  in  the  economic  scale,  is  that  of 
the  nomadic  peoples  shifting  their  tents  on  the  steppes  of  Cen- 
tral Asia  or  the  deserts  of  Arabia,  and  driving  their  herds  of 
oxen,  sheep,  camels  and  horses  before  them  in  search  of  pasture. 
It  is  the  kind  of  life  described  in  the  book  of  Genesis.  It  is 
like  that  lived  by  all  eastern  peoples  during  their  infancy. 

Domestication  for  Agricultural  Purposes. — The  appli- 
cation of  animal  strength  for  the  purpose  of  tilling  the  soil  and 
carrying  on  agricultural  operations,  belongs  to  the  last  and 
highest  stage  of  animal  domestication.  It  does  not  come  until 
long  after  men  have  acquired  the  art  of  putting,  animals  to  the 
uses  of  the  chase,  of  a  food  supply  and  of  transportation.  It 
relates  to  a  more  advanced  economic  state  than  we  are  now  dis- 
cussing. Men  were  not  agriculturists  until  long  after  they  were 
herdsmen.  "When  we  come  to  study  the  economic  life  of  the 
agriculturist,  we  may  think  of  him  as  having  once  been  a  hunter, 
using  the  horse  in  the  chase,  instead  of  before  the  plow. 

The  Number  of  Indigenous  Animals  Affecting  the  Pas- 
toral Life. — There  have  been  peoples  who  have  passed  from 
the  lower  economic  states  to  the  higher  without  having  prac- 
ticed the  pastoral  life.  Supposing  the  pastoral  state  to  repre- 
sent an  economic  state  between  that  of  the  hunter  and  the 
agriculturist,  we  find  that  some  peoples  have  never  lived  in 
this  intermediate  state.  And  again  there  are  peoples  who  have 
lived  a  partially  pastoral  life;  that  is,  they  have  domesticated 
and  employed  animals  for  perhaps  only  one  or  two  of  the  spe- 
cified purposes.  They  may  have  used  animals  as  assistants  in 
the  hunt,  and  may  have  used  them  as  a  permanent  source  of 
food  supply,  but  not  for  transportation  or  tillage.  The  number 
and  character  of  the  animals  capable  of  domestication,  indig- 
enous to  a  country,  is  said  to  produce  these  phenomena.  The 
use  of  domestic  animals  must  depend  upon  their  distribution. 
This  would  seem  to  be  a  fair  explanation  of  the  fact  that  some 
peoples  have  lived  only  a  partially  pastoral  life.  If  the  domestic 
animals  are  not  native  to  a  country,  its  people  cannot  be  expected 
to  domesticate  them  and  employ  them  in  economic  activity. 
The  highest  forms  of  pastoral  life,  from  an  economic  stand- 
point, have  developed  in  the  Eastern  hemisphere.     But  the 


THE  HERDSMAN.  43 

Eastern  hemisphere  had  nearly  all  the  domestic  animals.  It 
had  the  horse,  cow,  sheep,  goat,  and  ox.  The  Western  hemis- 
phere had  only  the  llama,  turkey,  and  dog,  and  when  Columbus 
discovered  it  the  Indians  had  fully  domesticated  them  and  were 
putting  them  to  all  the  economic  uses  of  which  they  were 
capable.  These  races  may  therefore  be  said  to  have  attained 
the  highest  pastoral  life  which  their  environment  permitted. 
The  distribution  of  the  domestic  animals  is  not  a  perfectly 
satisfactory  explanation  of  these  questions,  however.  It  as- 
sumes that  the  animals  which  we  know  as  the  domestic  animals 
are  the  only  animals  capable  of  domestication.  When  we  find 
a  race  which  has  lived  only  a  partially  pastoral  life,  or  which 
has  passed  from  the  hunter  state  to  the  agricultural  state  with- 
out passing  through  the  pastoral  state,  it  will  frequently  be 
found,  on  closer  investigation,  that  it  has  not  been  left  to  itself 
to  work  out  its  economic  salvation  and  climb  the  economic 
ladder  in  the  natural  way.  It  has  been  brought  in  contact  with 
a  higher  civilization,  and  with  a  bound  entered  into  the  eco- 
nomic life  and  passed  to  the  higher  economic  state  of  that 
civilization.  The  possibilities  of  adding  to  the  stock  of  known 
domestic  animals,  referred  to  in  the  following  paragraph,  will 
further  illustrate  this  subject. 

New  Domestic  Animals. — The  process  of  animal  domesti- 
cation requires  ages  for  its  development.  Only  long  continued 
and  patient  effort  succeeds.  There  must  be  a  constant  and 
pressing  need  for  the  aid  of  animal  powers  in  order  to  keep 
men  to  the  sticking  point.  We  need  hardly  expect,  therefore, 
that  animals  which  have  not  been  domesticated  in  the  ages 
of  the  past  will  be  brought  into  a  state  of  domestication  in  the 
future,  for  the  simple  reason  that  the  need  of  new  domestic 
animals  is  not  keen  and  urgent,  and  there  is  little  inducement 
to  make  the  attempt.  The  zebra  and  quagga  are  just  as  capable 
of  domestication  as  the  horse,  but  the  horse  answers  all  the  pur- 
poses of  man,  and  nothing  would  be  gained  by  domesticating 
the  zebra  or  quagga  In  this  connection  it  is  interesting  to 
conjecture  whether  the  American  Indians  would  have  domesti- 
cated the  bison  if  they  had  been  left  in  undisturbed  possession 
of  the  continent.     It  is  even  of  more  interest  to  ponder  on  the 


44  DESCRIPTIVE  ECONOMICS. 

economic  results  had  Columbus  found  the  buffalo  already  do- 
mesticated. It  is  not  impossible  for  the  animal  to  have  become 
an  important  factor  in  national  wealth.  The  meat  of  the  ox 
was  once  coarser  and  more  unpalatable  than  the  meat  of  the 
wild  buffalo.  Domestication  would  have  improved  the  quality 
of  the  meat  and  resulted  in  an  increased,  permanent  source 
of  food  supply.  The  buffalo  would  be  on  its  native  heath,  and 
the  severe  winters  which  have  proved  destructive  to  cattle  ranch- 
ing in  the  west  would  have  little  terror  for  the  buffalo  ranch- 
man. We  might,  with  profit,  indulge  in  the  same  speculation 
with  reference  to  the  higher  pastoral  state  to  be  assumed  by  the 
African  tribes  if  left  to  themselves,  for  the  lapse  of  the  ages 
required  to  domesticate  the  zebra  and  quagga  and  bring  them 
to  the  stature  and  perfection  of  the  horse.  The  profit  of  such 
speculation  consists  of  the  side  light  thrown  upon  our  study. 
It  gives  us  a  clearer  appreciation  of  what  we  once  were  and 
what  our  economic  condition  was  when  the  race  was  in  its 
infancy — how  we  have  become  what  we  are  and  how  we  have 
reached  our  present  economic  life. 

The  Second  Triumph  over  Nature. — The  first  marked 
triumph  which  man  achieved  over  the  forces  of  nature  con- 
sisted in  his  acquisition  of  the  art  of  hunting.  We  have  seen 
how  his  material  welfare  and  economic  conditions  were  bet- 
tered when  he  entered  the  hunter  state.  How  much  greater 
was  the  betterment  when  he  entered  the  pastoral  state  !  He 
has  now  achieved  his  second  triumph. 

Milk  and  Meat  Subsistence. — As  hunters,  men  added  the 
products  of  the  chase  to  the  spontaneous  fruits  of  nature  as  a 
source  of  subsistence,  but  even  with  such  addition,  subsistence 
was  scanty  and  uncertain.  In  the  pastoral  state,  however, 
there  is  the  further  addition  of  a  stated  supply  of  meat  and 
milk.  It  is  reasonably  sure.  If  natural  fruits  fail  and  game 
is  scarce  one  of  the  herd  can  be  slaughtered.  The  domestic 
animal  can  forage  and  preserve  existence  where  wild  game  does 
not  abound,  and  where  there  are  no  vegetable  productions 
suitable  for  man. 

Enlargement  of  Habitat. — In  the  pastoral  state  there  is 
only  a  small  part  of  the  earth's  surface  which  man  cannot 


THE  HERDSMAN.  45 

inhabit.  In  the  frugiferous  age  when  he  lived  on  the  spon- 
taneous fruits  of  nature  he  was  limited  to  a  very  restricted 
habitat.  With  the  entrance  upon  the  hunter  state  his  habitat 
is  enlarged.  Up  to  that  time,  however,  subsistence  abounds 
only  in  a  well  watered,  forest  country.  Now  that  he  has  be- 
come a  herdsman  and  shepherd  he  can  spread  out  and  occupy 
the  plains  and  the  deserts.  He  can  go  into  regions  of  inhos- 
pitable climates.  By  the  addition  of  meat  and  milk  subsistence, 
the  supporting  capacity  of  a  territory  is  greatly  enlarged.  The 
area  over  which  one  hunter  must  roam  and  be  left  in  undis- 
turbed pursuit  of  the  game,  in  order  to  get  a  living,  will  sup- 
port many  men  who  are  both  hunters  and  herdsmen.  It  has 
been  claimed  that  the  average  huntsman  requires  fifty  thousand 
acres  for  his  support. 

Material  Advancement. — The  advancement  of  man's  ma- 
terial welfare  by  his  entrance  upon  the  pastoral  life  cannot  be 
easily  over-estimated.  Food  is  not  only  more  stated  and  sure, 
but  so  also  are  clothing  and  shelter.  There  are  many  peoples 
who  still  dress  in  sheepskins  and  goatskins,  and  make  their 
tents  of  raw  hide.  When  the  Spaniards  colonized  the  western 
hemisphere  and  introduced  the  horse,  the  Patagonians  were  in 
the  rudest  hunter  state.  Within  thirty  years  afterwards  they 
made  use  of  the  horse  which  the  Spaniards  had  brought,  and 
being  mounted  for  the  chase  they  were  enabled  to  capture  the 
native  guanacho  in  quantities  entirely  sufficient  forfood.  The 
average  stature  and  longevity  immediately  increased  and  they 
became  a  fairly  well  to  do  race. 

Famines  Still.  —  It  appears  that  the  pastoral  life  is  not 
without  its  times  of  scarcity.  The  multiplication  of  the  herds 
which  must  keep  pace  with  the  growth  of  population  over- 
crowds the  pasture.  The  time  comes  when  the  people  can- 
not be  fed  "by  the  mere  pasturage  of  land."  Prior  to  that 
time,  moreover,  diseases  which  the  rude  intelligence  of  the  time 
cannot  successfully  combat,  thins  out  the  flocks,  and  recurring 
droughts  leave  the  animals  without  sustenance.  Herdsmen  are 
early  and  often  acquainted  with  famine.  They  must  separate, 
as  bees  at  swarming  time,  and  be  keenly  alive  to  provide  fresh 
grass  and  water  for  the  wants  of  their  animals.     The  pastoral 


46  DESCRIPTIVE  ECONOMICS. 

life,  with  its  milk  and  meat  subsistence,  superadded  to  all  the 
forms  of  subsistence  which  have  preceded  it  in  the  order  of 
development,  will  not  support  a  nation  and  satisfy  its  economic 
wants  without  frequent  famines. 


WANTS  AND  EMPLOYMENTS   OF  FAMILY  ECONOMICS.      47 


CHAPTER  V. 

WANTS  AND   EMPLOYMENTS  OF   FAMILY 
ECONOMICS. 

A  Nomadic  Life. — A  marked  feature  of  the  stage  of  indus- 
trial society  which  we  are  studying — that  stage  in  which  the 
economically  isolated  family  is  the  highest  type — is  the  nomadic 
state  in  which  men  live.  They  are  nomads,  wandering  hither 
and  thither  in  search  of  subsistence.  They  have  no  permanent 
and  fixed  abode.  It  is  camp  life,  and  the  camp  is  a  temporary 
rendezvous.  It  is  occupied  as  long  as  the  berries  or  game  of 
the  neighborhood  last,  or  until  the  pasturage  gives  out. 

The  Wants  of  Food. — The  food  which  the  nomad  wants  is 
simply  that  which  will  fill  the  stomach  and  satisfy  his  hunger. 
So  long  as  there  is  enough  of  it  to  sustain  life,  little  objection 
is  made  to  quality.  It  is  true  that  while  the  comforts  of  a 
stated  sufficiency,  and  of  the  increasing  nutritive  quality  as- 
cending from  the  frugiferous  state  to  the  pastoral  state,  may 
be  appreciated,  yet  the  wants  of  food  in  the  family  stage  of 
economics  relate  mainly  to  the  necessities  of  life.  The  eco- 
nomic activity  of  the  nomad  seeks  to  satisfy  necessary  wants. 
Comforts  of  food  come  into  demand  at  a  later  economic  stage. 

Nomadic  Cookery. — We  have  noticed  that  a  distinguishing 
feature  between  man  and  the  lower  animals  is  the  development 
by  man  of  increasing  wants  with  increasing  civilization.  Ani- 
mals have  the  same  wants  in  all  stages  of  evolution.  Another 
distinction  lies  in  the  fact  that  man  is  a  cooking  animal. 
Economics  has  little  to  do  with  the  prehistoric  times  when  men 
did  not  know  the  art  of  fire  making  and  the  art  of  cooking. 
Of  course,  in  the  beginning,  cookery  is  in  a  very  rude  state.  It 
begins  with  roasting  before  the  fire.  The  next  step  is  roasting 
in  the  ashes  or  hot  earth;  finally  a  hole  is  excavated  and  filled 
with  hot  stones,  and  a  fire  built  over  it.  A  primitive  oven  is 
a  hollow  tree  in  which  the  Andaman  Islanders  build  a  fire  and 
roast  wild  pigs.     A  better  oven  is  an  ant  hill,  from  which  the 


48  DESCRIPTIVE  ECONOMICS. 

Bushmen  drive  out  the  ants.  Boiling  comes  comparatively  late 
in  life.  It  is  first  performed  by  putting  hot  stones  into  a  vessel 
of  water.  The  Assiniboines  got  their  name  because  they  were 
boilers.  They  took  the  paunch  from  the  game,  filled  it  with 
water  and  put  in  hot  stones.  With  the  introduction  of  the  art 
of  boiling,  the  available  food  supply  is  greatly  increased,  be- 
cause many  articles  which  will  serve  for  food  if  properly  cooked 
can  not  be  cooked  in  any  other  way.  All  nomadic  cookery, 
however,  is  crude.  It  is  extremely  wasteful,  and  a  large  por- 
tion of  the  food  is  necessarily  spoiled  in  the  cooking.  As  the 
economic  condition  of  mankind  develops,  it  is  interesting  to 
note  how  health  is  preserved,  life  prolonged  and  material  wel- 
fare promoted  by  the  evolution  of  cookery. 

Wants  of  Clothing  and  Shelter. — They  are  even  more 
simple  than  the  wants  of  food.  Anything  will  answer  which 
will  ward  off  cold  and  the  blast.  The  clothing  of  the  hunter  is 
better  than  the  clothing  of  the  man  who  lived  on  the  spontan- 
eous fruits  of  nature,  and  the  hunter  is  more  sure  of  getting  his 
clothing.  With  the  advent  of  the  pastoral  life,  clothing  of  a 
still  better  quality  is  to  be  had.  As  to  shelter,  nomads  rarely 
want  a  permanent  structure  for  habitation  the  year  round. 
In  tropical  countries  the  structure  is  simply  some  bushes  thrown 
together,  or  leaves  spread  on  an  awning  of  poles.  Some  skins 
hung  on  the  bushes  to  windward  may  answer.  In  the  pastoral 
life  tents  come  into  vogue.  They  are  readily  made  from  the 
hides  of  the  slaughtered  animals.  In  climates  where  the  win- 
ters are  severe,  some  more  permanent  habitation  must  be  con- 
structed to  be  occupied  during  the  winter  season  and  aban- 
doned with  the  advent  of  spring.  As  a  rule,  however,  the  nomad 
spends  but  little  labor  in  house  building.  Game  or  pasture  is 
liable  to  fail  at  any  time,  and  he  must  move  on.  Sometimes, 
as  among  the  Klinkaths  of  the  northwest  coast,  house  posts  are 
erected  and  left  standing  at  different  places,  and  when  the  peo- 
ple are  obliged  to  migrate  they  simply  take  the  covering.  It  is 
a  great  step  in  advance,  however,  from  the  time  when  men  lived 
in  caves,  as  animals  burrow.  The  state  of  house  architecture 
among  a  people  is  a  fair  criterion  of  their  economic  condition. 
We  would  expect  a  people  living  in  huts  to  be  in  a  state  of  sav- 


WANTS  AND  EMPLOYMENTS  OF  FAMILY  ECONOMICS.      49 

agerj,  just  as  we  sujipose  that  well  appointed  and  comfortable 
houses  belong  to  a  people  having  attained  a  high  economic  state. 

Avocations  of  Nomadic  Life. — It  is  sometimes  said  that 
in  the  family  stage  of  economics  there  are  two  employments, 
and  they  are  such  as  belong  to  the  two  sexes.  In  other  words, 
that  the  men  do  everything  but  the  cooking.  This  is  hardly 
true,  because  among  all  rude  peoples  the  women  perform  almost 
as  much  general  labor  as  the  men.  An  Australian  traveler  tells 
how  he  saw  a  group  of  women  taking  turns  in  diving  from  a 
rock  after  mussels.  After  they  had  gathered  a  small  basketful, 
they  carried  them  to  the  camp  fire  around  which  the  men  were 
lying.  The  labor  performed  by  the  Indian  squaws  was  such  as 
is  now  performed  by  men.  On  the  other  hand,  men  also  were 
cooks.  The  fact  is,  every  person  was  berry  picker,  hunter  or 
herdsman,  as  necessity  demanded.  We  have  not  yet  reached  the 
time  when  a  person  followed  one  avocation.  In  the  family  stage 
of  economics,  each  member  of  the  family  is  ''jack  of  all  trades." 
Each  member  takes  his  turn  in  all  the  activities  which  go  to 
make  up  the  aggregate  economic  activity  of  the  family.  There 
is  no  division  of  employments.  There  is  no  dependence  of  man 
upon  man,  nor  is  one  family  dependent  for  any  portion  of  its 
wants  upon  another  family,  or  upon  the  economic  activity  of 
others. 

The  Lack  of  Wants. — Each  family  consumes  within  its  own 
family  circle  what  it  can  produce,  and  that  is  not  always  enough 
for  its  necessities;  and  although  we  may  presume  that  men  have 
always  had  some  wants  of  a  higher  character  than  wants  of 
necessity,  yet  the  chief  wants  of  the  isolated  family  are  primitive 
and  easily  satisfied.  Men  labor  in  order  to  obtain  necessities. 
They  do  not  labor  to  procure  comforts.  There  is  little  associated 
effort  among  men  to  overcome  the  forces  of  nature.  So  long 
as  thie  state  of  things  continues,  there  is  little  progress  toward 
the  higher  economic  stages.  Savagery  perpetuates  itself  in  the 
heart  of  Africa,  because  the  people  have  few  wants.  This  per- 
petuation of  savagery  is  a  violation  of  nature,  not  a  conformity 
to  it.  It  is  not  a  natural  condition  nor  an  illustration  of  a  law 
of  nature,  because  the  law  of  nature  is  to  grow  out  of  the  state 

where  there  is  a  lack  of  wants,  to  a  state  where  there  is  a  con- 
4 


60  DESCRIPTIVE  ECONOMICS. 

statit  increase  of  wants.  A  modern-day  illustration  in  our  own 
land  is  found  in  the  low  economic  condition  of  the  freedmen 
in  the  South.  There  is  a  lack  of  wants  among  them.  They 
are  too  easily  satisfied  with  the  bare  wants  of  necessity.  Let 
one  of  them  get  the  notion  that  he  wants  comforts — that  he 
wants  better  food,  a  comfortable  house  and  modern  conven- 
iences, and  he  is  sure  to  rise  rapidly  in  the  economic  scale. 
"  Man  shall  not  live  by  bread  alone."  The  mind  as  well  as  the 
stomach  must  be  fed,  and  must  have  wants. 


TBE  CAPITAL    OF  THE  FAMILY.  61 


CHAPTER  VI. 

THE  CAPITAL  OF  THE   FAMILY. 

Hoarding  by  Animals. — Many  animals  hoard  their  savings 
and  store  a  surplus.  They  get  together  a  fund  of  supplies  for 
use  in  time  of  want.  Squirrels  are  exceedingly  industrious 
when  food  is  plentiful.  There  are  species  of  ants  which  gnaw 
off  plumule  and  radicle,  and  stop  the  germination  of  seeds  after 
it  has  commenced,  so  that  they  may  be  kept  for  future  use. 
Like  a  thrifty  housewife,  they  preserve  food  for  the  winter. 
Ants  and  bees  store  for  their  offspring.  The  burrowing  beetles 
unite  in  digging  a  hole  for  a  bit  of  captured  food  of  which  there 
is  no  present  need,  just  as  a  dog  buries  a  piece  of  meat  which 
he  cannot  eat.  A  remarkable  instance  of  the  hoarding  habit 
of  animals  is  given  by  a  writer  on  animal  life,  who  describes 
how  the  sphex-wasp  paralyzes  a  cricket  or  other  insect  by  a 
sting,  and  puts  it  in  the  chamber  with  her  eggs  where  it  may 
**  remain  alive  as  fresh  meat  for  the  sphex  larva  when  that  is 
hatched."  Examine  a  web  of  the  common  spider  and  you  will 
find  a  magazine  of  house  flies. 

The  Capital  of  the  Nomad. — "A  rolling  stone  gathers  no 
moss,"  and  nomadic  man  gathers  few  goods.  The  habits  of 
nomadic  life  preclude  storing  or  hoarding  for  future  use  and 
consumption.  Everything  must  be  carried  about.  For  a  large 
portion  of  the  year  camp  is  broken  daily,  and  the  fewer  the  be- 
longings, the  less  hindrance  to  travel.  Sir  Henry  Drummond 
states  that  in  the  heart  of  Africa  he  saw  a  savage  buried  with  all 
his  capital.  It  consisted  of  a  pipe,  a  rude  knife,  a  mud  bowl, 
some  arrows  and  a  bow  with  its  string  cut  in  twain;  and  the 
author  adds:     "We  were  so  once;  they  may  be  what  we  are." 

"Weapons. — We  come  to  another  distinction  between  men 
and  the  lower  animals.  Man  is  a  tool  making  animal.  Of  late 
years,  however,  it  is  claimed  that  this  distinction  is  not  con- 
clusive, because  some  of  the  anthropoid  apes  get  hold  of  a  fa- 
vorite club  or  bludgeon  and  use  it  in  the  arts  of  life  for  a 


52  DESCRIPTIVE  ECONOMICS. 

considerable  length  of  time  before  throwing  it  away.  But  man 
alone  evinces  forethought,  skill  and  deliberation  in  the  con- 
struction and  use  of  tools.  Weapons,  both  for  offensive  and 
defensive  warfare  and  for  use  in  the  chase,  are  the  first  forms  of 
capital.  They  are  the  investments  of  primitive  man — the  pro- 
duct of  his  labor  designed  for  future  use,  at  a  time  when  he  is 
not  as  forehanded  as  those  animals  which  store  up  food. 

Progressive  Forms  of  Capital. — After  weapons  come  sim- 
ple utensils  used  in  preparing  food.  The  storing  of  food  itself, 
for  future  consumption,  does  not  come  until  long  afterwards. 
In  the  family  stage  of  economics  it  exists  only  in  a  very  rude 
form.  When  men  attempt  to  live  in  northern  climates,  how- 
ever, they  must,  to  a  certain  extent,  gather  together  a  supply 
of  food  for  winter  use  unless  they  are  in  a  pastoral  state.  Few 
of  the  North  American  tribes  made  other  than  rude  attempts 
toward  accumulating  supplies,  and  consequently  the  winter 
season  was  one  of  extreme  hardship  and  suffering.  These  tribes 
illustrate  the  family  stage  of  industrial  society.  At  this  stage, 
flocks  and  herds  are  the  highest  form  of  capital.  As  a  rule 
everything  is  produced  for  immediate  use  and  consumption, 
and  everything  must  be  transportable.  Men  preserve  and  breed 
the  domestic  animals  because  the  animals  can  transport  and 
take  care  of  themselves. 

Community  of  Capital. — These  are  the  days  of  communism 
pure  and  simple.  Letourneau  in  his  work.  The  Origin  and 
Development  of  Property,  advances  the  idea  that  even  the 
weapons  of  primitive  men  are  the  common  property  of  the 
family.  In  the  hunter  state,  the  game  is  common  property  and 
there  are  strict  rules  and  regulations  for  its  division  among 
the  members  of  the  family.  Most  of  the  Indian  tribes  had 
well  defined  rules  for  the  division  of  the  various  parts  of  an 
animal  killed  in  the  chase,  or,  if  more  than  one  animal  was 
killed,  for  a  division  of  the  whole.  Among  some  of  the 
Australian  tribes  the  principal  hunter,  when  the  forequarters 
of  a  kangaroo  fall  to  his  lot,  must  take  **  the  head  and  neck, 
with  another  joint,  cutlet  and  fillet,  and  hand  it  over  to  his 
father-in-law."  The  rest  must  go  to  his  father;  but  these  in 
turn  must  make  a  final  division  of  the  meat  among  the  other 


THE   CAPITAL    OF  THE  FAMILY.  53 

members  of  the  family.  If  the  hunter  spears  a  large  fish,  the 
tail  end  belongs  to  himself,  and  goes  to  his  branch  of  the 
family.  The  other  part  falls  to  his  wife,  and  she  divides  that 
among  her  relations.  The  flocks  are  always  the  common  prop- 
erty of  the  family.  House  structures  were  also  common 
property.  The  long  house  of  the  Iroquois  was  sometimes  from 
twenty  to  thirty  feet  broad,  and  eighty  to  one  hundred  feet 
long,  and  was  subdivided  into  apartments.  It  belonged,  how- 
ever, to  the  gens  or  clan,  which  was  an  economic  family,  and 
each  member  had  an  interest  in  it.  There  was  not  only  com- 
mon property  in  the  house,  but  also  common  property  in  all 
such  provisions  as  might  be  on  hand. 

A  Good  Reason  for  Community  of  Capital. — In  the  early 
economic  stages  there  is  ample  reason  for  community  of  property 
and  family  ownership  of  the  various  articles  which  have  to  do 
with  the  family  subsistence.  Private  ownership  of  property  is 
not  yet  established.  We  are  not  to  understand  that  peoples 
living  in  a  state  of  savagery  and  barbarism  object  to  private 
ownership  of  property  on  any  of  the  so-called  moral  grounds 
commonly  advanced  by  modern  thinkers.  They  don't  say  it  is 
wrong.  They  say  a  man  may  have  what  he  can  retain  in  his 
possession.  But  the  struggle  for  subsistence  which  men  are 
waging  with  wild  beasts  is  not  calculated  to  create  respect  for 
the  weaker  or  to  cultivate  distinctions  between  mine  and  thine. 
It  is  rarely,  therefore,  that  a  man  can  retain  property  in  his 
possession  without  the  assistance  of  the  members  of  his  family. 
That  which  requires  the  united  strength  of  the  family  to  retain 
will  naturally  be  the  property  of  the  family,  and  each  member 
will  have  a  proprietary  interest  in  it.  In  the  early  economic 
stages  there  is  community  of  property,  therefore,  because  right 
of  property  is  founded  simply  upon  possession,  and  it  is  a  con- 
stant conflict  between  family  and  family,  tribe  and  tribe,  horde 
and  horde,  for  the  retention  of  possession. 

The  Number  of  the  Family. — Just  here  it  will  be  well  for 
us  to  see  that  we  have  a  clear  conception  of  the  scope  of  the 
term  "family,"  as  viewed  from  an  economic  standpoint.  In 
another  chapter  enough  was  said  to  make  clear  the  meaning  of 
the  term  *'  economic  isolation."     Something  may  still  be  un- 


54  DESORIPTIVE  ECONOMICS. 

said,  however,  to  make  clear  the  economic  meaning  of  the 
term  "family."  It  may  include  only  the  father,  mother, 
and  children.  As  a  rule,  however,  it  includes  many  others. 
Moreover,  it  may  not  be  composed  wholly  of  related  individuals. 
Ethnology  recognizes  the  Consanguine  family,  the  Punaluan, 
the  Syndyasmian,  the  Patriarchical  and  the  Monogamian  fam- 
ilies. The  Economic  family  is  none  of  these.  It  is  composed 
of  a  number  of  individuals  who,  irrespective  of  any  ties  of  con- 
sanguinity, unitedly  engage  in  the  struggle  for  a  living.  The 
union  is  a  strictly  economic  one,  without  reference  to  social 
or  political  institutions.  The  ieconomic  activity  of  each  mem- 
ber is  co-extensive  with  and  of  the  precise  nature  of  that  of 
every  other  member.  There  may  be  few  or  many  members. 
The  economic  family,  therefore,  includes  the  tribe  and  the  no- 
madic horde.  It  includes  any  aggregation  of  individuals,  closely 
uniting  their  economic  activities  in  the  art  of  getting  a  living, 
and  pursuing  them  independently  of  all  other  individuals  or 
aggregations  of  individuals.  Each  nomadic  band,  group,  tribe 
or  horde  produces  within  its  immediate  circle  and  exclusively 
by  the  labor  of  its  members  all  the  things  which  satisfy  its 
economic  wants.  Whatever  its  political  or  social  ties  or  insti- 
tutions, therefore,  it  is  an  economic  family.  The  division  is 
made  solely  on  economic  lines  and  irrespective  of  ethnical  or 
political  considerations. 


PRIMITIVE  BARTERING   AND  MANUFACTURING.  55 


CHAPTER  VII. 

PRIMITIVE  BARTERING  AND  MANUFACTURING. 

Another  Human  Characteristic. — We  have  from  time  to 
time  noticed  that  there  are  economic  characteristics  common  to 
all  animals,  including  man.  It  is  quite  the  rule  to  find  some  evi- 
dences, though  they  may  be  slight,  of  the  existence  of  nearly  all 
the  primary  economic  conditions  among  the  brute  creation. 
Now  and  then,  however,  we  study  animal  life  in  vain  to  find 
signs  of  some  of  those  conditions.  The  matter  of  bartering  or 
exchanging  commodity  for  commodity,  is  one  of  the  instances. 
Honey  laden  bees  are  known  to  divide  their  spoil  with  hungry 
comrades.  There  are  some  species  of  ants  which  do  the  same 
thing,  and  do  it  habitually  and  consistently.  The  process  is 
thus  described  :  "The  ant  who  feels  the  need  of  food  begins 
by  tapping  her  two  antennas  with  a  very  rapid  movement  upon 
the  antennae  of  the  ant  from  whom  she  expects  succor. 
Immediately  they  may  be  seen  approaching  each  other  with 
open  mouths  and  extended  tongues,  for  the  communication  of 
the  liquid  which  one  possesses,  to  the  other.  During  this 
operation  the  ant  who  receives  nourishment  does  not  cease  to 
caress  the  friend  who  is  feeding  her,  continuing  to  move  her 
antennae  with  singular  activity."  These  instances  and  others 
of  like  character  are  sometimes  cited  to  prove  that  animals 
make  exchanges.  It  is  not,  however,  an  illustration  of  barter- 
ing, or  exchanging.  It  rather  illustrates  community  of  prop- 
erty, and  common  ownership  in  the  fruits  of  labor.  Adam 
Smith  long  ago  said  that  man  is  the  only  animal  which  makes 
exchanges.  Subsequent  investigation  has  disclosed  no  fact 
tending  to  throw  doubt  upon  the  correctness  of  his  statement. 

Barter  in  Game. — Food  is  the  first  article  of  barter.  The 
territory  occupied  by  one  nomadic  band  may  be  better  supplied 
with  some  article  of  subsistence,  than  contiguous  territory 
occupied  by  another  band.  A  change  of  diet  is  the  first  incen- 
tive to  barter.  A  market  in  Africa  may  be  wherever  two  bands 
meet  beneath  the  trees,  each  having  a  surplus  of  food  of  differ- 


56  DESCRIPTIVE  ECONOMICS. 

ent  kinds.  A  band  of  Ashangoes,  for  instance,  who  live  mainly 
upon  fruits^  and  are  poor  hunters,  may  meet  a  band  of  Obon- 
goes,  a  forest  tribe  of  hunters,  and  a  bunch  of  plantains  may 
be  exchanged  for  a  monkey.  It  is  almost  a  rule,  however,  that 
barter  of  this  character,  as  well  as  all  barter  which  may  be  car- 
ried on  in  the  early  stages  of  economics,  is  an  exchange  of  the 
surplus  of  the  spontaneous  fruits  of  nature,  or  of  good  fortune 
in  the  hunt.  Primitive  men  do  not  gather  fruits,  or  labor  in 
the  chase,  to  procure  a  surplus  for  the  purpose  of  barter. 

Barter  in  Weapons. — After  barter  in  food  products  comes 
barter  in  weapons — weapons  of  the  hunt  or  of  war.  In  this 
case  also,  the  natural  productions  of  a  territory  have  something 
to  do  with  the  acquisition  of  a  surplus.  One  tribe,  by  reason 
of  the  existence  of  more  appropriate  materials  in  its  territory,  is 
enabled  to  produce  a  more  effective  weapon  than  its  neighbors. 
Some  of  the  South  American  tribes  have  become  noted  for  their 
make  of  blow  gun.  Others  have  almost  a  monopoly  of  the 
manufacture  of  the  poison  with  which  the  blow  gun  arrows  are 
tipped.  It  is  a  tribal  secret.  Exchange  of  various  commodities 
in  return  for  this  poison  extends  nearly  across  the  continent. 

Barter  in  Domestic  Animals. — Passing  from  the  hunter 
state  to  the  pastoral  state,  men  have  a  largely  increased  stock 
of  ready  capital  with  which  to  barter.  They  no  longer  depend 
upon  the  fortuitous  bounty  of  nature  for  a  supply  of  com- 
modities which  can  be  exchanged  for  something  which  they 
want  and  do  not  have.  Just  as  the  pastoral  life  gave  them  a 
sure  and  certain  meat  and  milk  subsistence,  so  it  gave  them  a 
greater  variety  of  articles  of  diet,  because  animal  possessions 
were  ever  at  hand  to  barter  for  other  things.  In  the  state  of 
industrial  society,  however,  which  we  are  now  studying,  barter 
was  usually  in  food  or  in  utensils  with  which  to  obtain  food. 
Barter  in  ornaments  belongs  to  a  later  stage  and  is  between  sav- 
ages on  the  one  hand  and  civilized  or  semi-civilized  men  on  the 
other. 

A  Family  Matter.  —  Economics  of  the  family  has  to  do 
only  with  barter  between  families.  The  term  family,  however, 
includes,  as  stated  in  the  last  chapter,  the  anarchic  band  or 
unorganized  horde  which,  economically  speaking,  is  only  an 


PRIMITIVE  BARTERING   AND  MANUFACTURING.  57 

enlarged  household  or  family.  Barter  is  controlled  by  the  band, 
and  it  is  a  matter  of  which  the  band  takes  cognizance.  It  is 
transacted  with  more  or  less  ceremony  and  formality.  The 
historian  Bancroft  tells  that  among  the  Indians  of  the  north- 
west, when  one  tribe  desires  to  carry  on  barter  with  another, 
the  commodities  which  it  desires  to  exchange  are  left  on  the 
river  bank.  The  other  party  to  the  transaction  comes  and  sur- 
veys them.  If  they  are  desired  and  are  satisfactory  they  are 
taken  away,  and  commodities  which  would  make  a  fair  exchange 
are  left  in  their  place.  Among  the  Nubians  when  two  bands 
determine  to  trade,  each  side  is  drawn  up  in  battle  array  and 
individuals  selected  by  the  several  bands  carry  out  the  transac- 
tion between  the  lines. 

Discouragements  of  Barter. — It  took  centuries  for  men 
to  acquire  the  art  of  bartering,  just  as  it  took  them  centuries 
to  acquire  the  other  arts  which  have  marked  their  economic 
growth.  Bartering  is  not  brought  to  a  system  until  a  higher 
and  later  economic  stage  is  reached.  There  are  several  reasons 
why  bartering  among  primitive  people  is  uncertain  and  desul- 
tory. Chief  among  them  is  the  fact  that  all  property  is  owned 
in  common  by  the  family  or  band.  Each  member  has  a  pro- 
prietary interest  in  all  the  productions  of  the  family  and  in  all 
the  possessions  of  the  family.  This  common  ownership  extends 
to  the  game  and  the  j&ocks,  and  even  to  the  weapons.  The  in- 
dividual members  of  the  band,  therefore,  can  have  nothing  to 
say,  and  are  not  concerned  in  the  matter  of  bartering.  This 
explains  why  the  whole  band  or  horde  regulates  trade.  Another 
reason  is  because  of  the  lack  of  security  in  the  possession  of 
property.  There  is  mutual  distrust  between  family  and  family, 
and  between  band  and  band.  Might  makes  right,  and  pos- 
ession  is  "nine  points  of  the  law."  The  individual  has  no 
private  property,  because  he  can  not  hold  on  to  it  and  defend 
it,  and  for  this  reason  the  band  owns  the  property  in  common. 
Again,  barter  is  limited,  because  transportation  is  limited. 
There  is  a  lack  of  what  has  been  called  transmissibility — the 
ability  and  power  to  transport  and  transmit  goods  and  com- 
modities from  hand  to  hand.  There  is  also  a  lack  of  diversity 
of  commodities  for  exchange. 


68  DESCRIPTIVE  ECONOMICS. 

The  Beginning  of  Manufactures. — The  time  comes  in  the 
history  of  every  people  when  they  acquire  more  or  less  skill  in 
some  one  direction.  When  the  tribe  comes  to  be  known  for  its 
brand  of  weapons,  barter  in  them  arises.  But  among  the  mem- 
bers of  the  band  certain  individuals  possess  greater  deftness  and 
skill  in  manufacturing  than  their  fellows.  By  continued  ap- 
plication they  develop  their  native  skill.  Their  manufactures 
come  into  demand,  not  only  in  neighboring  bands,  but  in  their 
own  band,  and  the  industry  of  weapon  making  comes  to  exist. 
Longfellow's  "ancient  arrow  maker"  is  the  type  of  the  tribal 
artisan.     He  is  represented  by  the  poet  as: 

"Thinking  of  the  great  war-parties, 
How  they  came  to  buy  his  arrows, 
Could  not  fight  without  his  arrows." 

Judged  by  his  first  attempt  at  manufacturing,  man  seems  to 
be  but  little  higher  in  the  scale  than  the  beaver,  the  ant  and 
the  bee,  which  labor  in  common  and  own  the  fruit  of  their  labor 
in  common.  When  we  see,  however,  that  man  has  in  him  the 
germs  of  something  better — the  propensity  to  manufacture,  and 
to  barter  his  manufactures  for  other  wants,  then  we  see  that  he  is 
far  higher  than  the  beaver,  the  ant  and  the  bee.  Theirs  is  in- 
stinct. It  enables  them  to  produce  a  perfect  manufacture  and  a 
mechanism  most  suitable  for  its  purpose  at  the  first  trial.  Man's 
art  is  the  result  of  intelligent  reasoning,  and  when  he  puts  his 
propensity  into  operation  there  is  no  comparison.  Having  once 
exercised  this  propensity  for  tool  making  and  manufacturing, 
men  discover  that  it  is  easier  for  some  of  them  to  get  a  living 
by  bartering  the  results  of  their  skillful  labor,  for  food  and 
game,  with  those  who  are  better  hunters  and  shepherds.  When 
the  Dutch  and  English  traders  opened  communication  with 
the  tribes  of  the  western  continent,  the  Indian  quickly  found 
that  it  was  better  for  him  to  barter  his  furs  for  a  ready-made 
coat,  blanket  and  leggings,  than  for  him  to  make  them. 


CHARACTERISTICS   OF  FAMILY  ECONOMICS.  59 


CHAPTER  VIII. 

A  SUMMARY  OF  THE  CHARACTERISTICS  OF 
FAMILY   ECONOMICS. 

Reasons  for  a  Resume. — Some  of  the  economic  character- 
istics relating  to  the  first  stage  of  economics,  which  have  been 
under  discussion  in  part  one  of  this  book,  are  worth  reiterating. 
They  lie  at  the  foundation  of  all  economic  study,  and  a  clear 
understanding  of  them  will  be  necessary  in  order  to  render 
pleasant  and  interesting  the  succeeding  and  more  difficult  parts 
of  the  book,  relating  to  the  successive  and  higher  economic 
stages.  There  are  some  characteristics  worthy  of  mention, 
which  have  not  yet  been  discussed. 

The  Resistance  of  Nature. — One  of  the  principal  factors 
determining  the  economics  of  the  family  is  the  resistance  of 
nature.  Primitive  men  are  bewildered  in  the  presence  of 
natural  forces.  They  have  not  the  knowledge,  the  skill  nor 
the  unity  to  overcome  these  forces.  In  the  economic  stage  to 
which  we  have  thus  far  progressed  in  our  study,  the  highest  art 
which  men  practice  in  their  struggle  for  a  living  is  the  domes- 
tication of  animals.  Animal  domestication,  it  is  true,  places 
the  men  who  follow  it,  far  in  advance  of  the  men  who  depend 
upon  the  spontaneous  productions  of  nature,  yet  the  shepherd 
and  herdsman  know  what  it  is  to  hunger  and  famish.  The 
field,  the  forest,  and  the  mine  are  rich  with  treasures,  but  men 
do  not  know  how  to  find  and  use  them.  The  cotton  grows 
wild,  but  they  go  unclothed.  The  mine  contains  fuel,  but  they 
are  cold.  The  means  of  subsistence  are  scanty.  They  bear  an 
exceedingly  close  relation  to  the  necessities  of  life.  It  is  a  hand 
tb  mouth*  existence — an  existence  of  poverty,  isolation  and 
lawlessness. 

Lack  of  Association. — Men  have  not  learned  to  associate 
their  intelligence,  skill  and  strength.  It  is  an  age  of  distrust. 
Violence  rules,and  warfare  is  followed  as  consistently  as  the  hunt. 

Community  of  Living. — One  man  is  too  weak  to  face  the 
struggle  of  life  alone  and  protect  his  wife  and  children,  and 


60  DESCRIPTIVE  ECONOMICS. 

therefore  men  band  together  in  large  households,  usually  of 
related  families.  So  far  as  economics  is  concerned,  the  whole 
band  may  be  considered  as  an  economic  unit — an  enlarged 
family.  It  is  not  only  community  of  house  life,  but  com- 
munity of  labor,  and  absolute  community  of  ownership  in  all 
the  products  of  labor — in  all  the  supplies  and  possessions  of 
the  band.  In  the  beginning  man  has  no  greater  control  over 
the  production  of  food  than  other  animals,  but  when  a  number 
of  them  have  united  to  form  the  anarchic  horde,  their  power 
to  increase  the  sources  of  subsistence  is  enlarged.  The  growth 
of  this  power  as  we  shall  follow  it,  determines  the  growth  and 
existence  of  men  upon  the  earth. 

Centers  of  Population. — A  region  rich  in  natural  produc- 
tions became  a  center  of  population.  The  existence  of  fruits,  of 
game  and  of  pasture  were  the  conditions  demanded.  A  center 
of  population  required  running  streams  and  forests,  interspersed 
with  fertile  valleys  and  plains  or  openings.  There  were  hardly 
more  than  three  such  places  on  the  western  continent.  One 
was  the' Columbia  Eiver  valley;  another  was  the  lower  penin- 
sula of  Michigan,  including  the  lake  region  of  Minnesota; 
and  the  third  was  the  valley  of  Mexico.  Each  of  these  regions 
afforded  many  natural  advantages  for  the  existence  of  a  primi- 
tive and  nomadic  population,  and  from  each  of  them  the  popu- 
lation spread  out.  "When  the  relation  of  the  necessities  of  life 
to  the  means  of  subsistence  became  too  close,  a  band  wandered 
away  and  pushed  out  in  search  of  food.  When  it  found  a  suit- 
able territory  over  which  it  could  roam,  it  proceeded  to  occupy 
it  until  there  again  subsistence  became  scanty,  and  then  it  sub- 
divided. This  has  been  the  process  the  world  over.  The  west- 
ern hemisphere  is  selected  simply  for  an  illustration.  On  the 
eastern  hemisphere  we  can  trace  the  original  seats  of  popula- 
tion to  valleys  like  those  of  the  Nile,  of  the  Euphrates,  and  of 
the  Granges.  Eegions  of  this  character  have  been  aptly  termed 
the  "nurseries  of  the  race." 

The  Possession  of  Land. — Land  plays  only  a  minor  part 
in  the  economics  of  the  family.  A  nomadic  horde  or  tribe,  by 
force  of  might,  laid  claim,  it  is  true,  to  certain  territory  as  its 
hunting,  fishing  and  pasture  ground,  but  the  limits  of  that 


CHARACTERISTICS   OF  FAMILY  ECONOMICS.  61 

territory  were  loosely  drawn  and  ill  defined.  It  was  like  the 
territory  which  the  lion  or  tiger  claims  for  his  own  and  from 
which  all  other  beasts  must  keep  out.  Nevertheless,  it  repre- 
sented the  beginning  of  the  ownership  of  land. 

The  Beginning  of  Invention. — We  are  quite  apt  to  asso- 
ciate invention  with  historic  or  modern  times,  and  economic 
writers,  by  common  consent,  have  selected  a  certain  period  fol- 
lowing the  middle  ages  as  that  which  is  characterized  by  what 
is  called  "  the  industrial  revolution."  It  is  true  that  tbere  have 
been  specific  periods  when  the  progress  of  invention  and  indus- 
try has  been  more  marked  than  at  others — when  human  culture 
and  the  amelioration  of  the  condition  of  the  race  have  made 
great  strides.  Invention  and  the  industrial  revolution,  how- 
ever, really  begin  with  the  economics  of  the  family.  The  in- 
vention of  the  fish  hook  must  have  resulted  in  great  material 
advancement  of  the  people  who  employed  it.  Who  will  say 
that  the  invention  of  the  bow  and  arrow  did  not  produce  as 
great  a  revolution  in  the  economic  condition  of  men  as  any  in- 
vention since?  The  art  of  pottery  revolutionized  the  manner 
of  living.  "Man  commenced  at  the  bottom  and  worked  up." 
He  has  gone  from  higher  to  higher  arts  of  subsistence  as  he 
progressed.  With  each  successive  stage  he  has  increased  his 
power  over  the  forces  of  nature. 

The  Saturnian  Age. — The  economics  of  the  family  relates 
to  the  Saturnian  age.  The  wild  freedom  of  the  nomadic  life 
is  a  fit  subject  for  the  fancies  of  poets.  According  to  poetic 
notions  it  is  a  time  when: 

"  Ete  the  base  laws  of  servitude  began. 
When  wild  in  woods  the  noble  savage  ran." 

The  poetic  idea  is  misleading  so  far  as  the  economic  condition 
of  mankind  is  concerned.  There  was  a  certain  civil  freedom, 
to  be  sure,  but  it  was  accompanied  by  poverty,  hunger,  cold 
and  wretchedness.  There  was  a  certain  independence  of  sub- 
sistence, an  independence  in  which  each  family  looked  out  for 
itself — an  economic  isolation.  Frequently,  however,  it  failed 
to  bring  the  necessities  and  it  never  provided  the  comforts  of 
life.  The  best  provisioned  and  most  luxuriously  appointed 
American  indian  wigwam  never  had  half  the  comforts  com- 
mon to  the  most  wretched  Bowery  tenement. 


PART   II. 
EOOlSrOMIOS  OF  THE  TILLAGE. 


CHAPTEE  I. 
THE    AGRICULTURIST. 


Economic    Significance    of   the   Agricultural    Life. — 

There  is  a  Scandinavian  legend  of  a  giantess  who  saw  a  man 
plowing  with  a  yoke  of  oxen.  She  picked  him  up,  together 
with  his  plow  and  oxen,  and  putting  him  squirming  into  her 
apron,  ran  to  her  mother,  saying  :  "  Mother,  what  sort  of  a 
beetle  is  this  that  I  found  wriggling  in  the  sand  ?"  The 
mother  cried  out :  "  Put  it  away,  my  child.  We  must  be 
gone  out  of  this  land,  for  these  people  will  dwell  in  it."  The 
plowman  stands  for  a  new  and  higher  economic  stage.  The 
giantess  and  her  child  belong  to  an  older  and  a  lower  stage. 
The  representatives  of  the  lower  economy  must  give  way  to  the 
representatives  of  the  higher.  The  legend  is  intended  to  illus- 
trate the  inexorable  rule  that  lower  forms  of  economic  activity 
are  displaced  by  and  subjected  to  the  higher  forms,  whenever 
they  come  in  contact.  The  working  of  the  rule  is  especially 
noticeable  when  the  newer  agricultural  life  springs  up  beside 
the  older  pastoral  life.  The  herdsmen  cling  tenaciously  to 
their  old  ways  of  getting  a  living,  but  without  avail.  Tillage 
of  the  soil  is  sure  to  displace  pasturage,  because  it  is  more  pro- 
ductive and  efficient.  The  contest  which  commenced  about 
twenty  years  ago  on  the  trans-Missouri  plains,  between  the 
"cow-boy"  who  was  pasturing  the  land,  and  the  "granger" 
who  would  till  it,  has  slowly  but  surely  progressed  in  favor  of 
the  tiller  of  the  soil. 

an 


64  DESCRIPTIVE  ECONOMICS. 

The  First  and  Second  Economic  Stages  Compared. — 

The  outline  of  the  study  of  family  economics  is  nearly  com- 
pleted. The  economies  of  the  family  has  been  represented . 
as  being  the  first  of  the  economic  stages  through  which 
mankind  passes.  It  relates  to  the  beginning  of  industrial 
society.  The  term  "  Economics  of  the  Family"  is  employed, 
because  the  family  is  both  the  unit  and  at  the  same  time  the 
highest  form  of  industrial  society.  From  an  economic  stand- 
point the  household,  the  anarchic  group,  the  nomadic  band, 
tribe  or  horde,  are  families.  Their  economic  life  is  isolated. 
There  is  no  economic  dependence  of  family  upon  family ;  of 
one  domestic  group  upon  another ;  of  horde  upon  horde.  As 
to  sources  of  subsistence,  the  stage  begins  with  a  subsistence 
upon  the  spontaneous  fruits  of  nature.  Next  a  subsistence 
of  wild  game  and  fish  is  superadded.  The  stage  ends  with  the 
milk  and  meat  subsistence  of  the  pastoral  life.  The  struggle 
for  subsistence — for  the  necessary  wants  of  food — is  the  main 
feature  of  the  first  economic  stage,  and  therefore,  the  economy 
of  the  family  relates  mainly  to  the  sources  of  subsistence. 

The  second  of  the  economic  stages  is  called  "  Economics  of 
the  Village."  The  family  or  domestic  group  ceases  to  be  the 
economic  unit.  Industrial  society  assumes  the  higher  form  of 
the  village  community.  Economic  dependence  of  domestic 
groups  begins,  and  a  larger  body  of  individuals  practice  a 
mutual  economy.  The  tillage  of  land  begins  to  be  the  chief 
source  of  subsistence.  No  particular  form  of  economic  activity 
distinguishes  the  stages,  or  marks  the  transition  from  one  to 
the  other.  The  transition  is  by  slow  degrees,  so  gradual  as  to 
be  imperceptible.  There  is  no  exact  date  when  a  people  leaves 
one  stage  and  enters  another  and  higher  stage.  And  then,  too, 
certain  features  of  family  economy  remain  in  the  second,  and 
even  in  the  third  of  the  economic  stages.  The  last  vestige  of 
the  family  system  disappears  only  when  towns  and  cities  have 
arisen,  when  merchants  follow  trading  as  an  industrial  occu- 
pation, and  artisans  devote  themselves  to  manufacturing.  Not 
until  then  does  the  family  become  wholly  dependent  upon  the 
labor  of  persons  not  members  of  its  immediate  circle. 

Tlie  Bude  Beginnings  of  Agriculture. — Tillage  had  its 


THE  AGRICULTURIST.  66 

origin  during  the  period  of  the  hunter  life.  When  game  was 
scarce  the  hunter  gathered  the  fruitage  of  plants.  Chance 
seeds  were  dropped  about  the  camp.  Eeturning  at  a  later  sea- 
son to  the  old  camp  ground,  the  hunter  finds  that  the  seeds 
have  germinated  and  produced  a  "volunteer"  crop.  Most  of 
the  farinaceous  plants  grew  wild  in  their  native  haunte, 
although  in  a  very  undeveloped  state.  For  instance,  in  the 
shallow  waters  of  American  rivers  and  lakes  north  of  the  for- 
tieth parallel,  the  zizania  palustris,  or  wild  rice,  is  found  in 
the  wild  state.  It  once  flourished  in  such  quantities  as  to  form 
an  important  source  of  Indian  subsistence.  It  ripens  in  Sep- 
tember, and  with  each  returning  autumn  it  was  the  duty  of 
the  Indian  women  to  set  out  in  their  canoes,  and  paddling  into 
the  rice  fields,  gather  boat  loads  of  grain.  It  has  been  sug- 
gested that,  if  left  to  the  course  of  nature,  the  Indians  might 
have  domesticated  the  bison  and  thus  have  added  to  the  stock 
of  domestic  animals.  So  they  might  have  reduced  the  wild 
rice  to  a  state  of  cultivation  and  produced  another  farinaceous 
plant.  In  the  course  of  time  some  of  the  grains  would  cer- 
tainly have  been  scattered  about  a  camp  ground  beside  a  lake 
or  river.  They  would  have  rooted  there,  and  the  savage  mind, 
so  constantly  in  touch  with  nature,  would  have  noticed  the 
growth  and  profited  by  it. 

Ages  of  Cultivation. — It  might  have  taken  the  Indians 
centuries  to  develop  a  profitable  agricultural  plant  from  the 
wild  rice  plant.  All  of  the  farinaceous  plants,  and  perhaps  all 
of  the  plants  propagated  for  food,  have  required  centuries  of 
cultivation  to  bring  them  to  a  perfected  state.  The  maize  or 
Indian  corn,  the  chief  of  the  food  plants  of  the  western  hemi- 
sphere, is  supposed  to  have  originated  in  Mexico  and  thence 
spread  northward.  It  was  not  found  growing  in  the  wild  state 
with  two  or  three  fully  formed  ears  to  the  stalk.  Like  the  other 
farinaceous  plants,  it  belongs  to  the  family  of  grasses,  and  its 
progenitor  was  doubtless  a  rude  grass  bearing  little  fruit. 

Indigenous  Plants. — The   order  in  which   peoples  have 

entered  the  agricultural  life,  and  the  extent  to  which  they  have 

engaged  in  agriculture,  have  depended  upon  the  distribution 

of  the  food  plants.     Just  as  the  eastern  hemisphere  was  most 

5 


66  DESCRIPTIVE  ECONOMICS. 

richly  endowed  with  those  animals  which  have  proven  useful 
and  profitable  for  domestication,  so  it  was  most  richly  endowed 
with  farinaceous  plants.  The  western  hemisphere  had  only 
one  of  those  plants — the  maize,  or  Indian  corn.  That  one, 
however,  as  Mr.  Lewis  Morgan  has  remarked,  was  the  best  of 
aH  for  primitive  agricultural  purposes,  if  only  one  was  to  be 
had.  It  grows  in  hills  or  with  detached  stalks  strong  enough 
to  withstand  the  vicissitudes  to  which  it  will  be  subjected 
under  a  rude  system  of  husbandry.  Hill  culture  is  best 
adapted  to  the  character  of  primitive  cultivation.  When  the 
western  hemisphere  was  discovered,  however,  there  were  found 
under  cultivation,  besides  maize,  certain  species  of  beans  and 
squashes,  and  one  or  two  minor  vegetable  plants.  The  distri- 
bution of  the  animals  adapted  to  domestication  has  also  some 
significance  with  reference  to  the  introduction  of  agriculture. 
Where  these  animals  were  wanting,  the  inhabitants  frequently 
passed  directly  from  the  hunter  state  to  a  rude  agricultural 
state,  without  passing  through  the  intervening  pastoral  state. 
Most  of  the  North  American  hunting  tribes  were  partially 
agricultural.  They  never  pursued  pastoral  occupations.  The 
horse  breeding  developed  among  the  plains  Indians  was  not  a 
native  industry,  as  the  horse  had  become  extinct  at  the  time  of 
the  discovery.  The  Indians  simply  applied  to  their  domestic 
uses  the  horse  which  the  Spaniards  brought  among  them,  and 
the  art  of  rearing  was  doubtless  taught  them  by  their  visitors. 
Nascent  Agriculture. — The  early  practice  of  agriculture 
is  rude  and  simple  in  the  extreme.  An  open  patch  of  alluvial 
soil  is  pricked  with  a  stick  hardened  in  the  fire.  The  seeds 
are  planted  in  a  spirit  of  frolicsomeness  and  gayety.  Anxiety 
for  the  welfare  of  the  little  crop  is  dismissed.  If  it  weathers 
the  drought  and  surmounts  the  weeds,  it  is  gathered  in  the 
same  spirit  of  playfulness.  The  main  dependence  of  life  is 
still  on  the  herds  and  the  hunt.  A  tourist  who  has  been  wont 
to  camp  in  the  summer,  on  the  northern  shore  of  Georgian 
Bay,  has  described  the  nascent  Indian  agriculture  which  he 
observed  there.  On  the  sheltered  shore  of  a  little  cove,  not  far 
from  the  camp  ground,  an  Indian  had  built  a  hut  in  an  open- 
ing in  the  forest.     The  hut  was  never  occupied  during  the 


THE  AGRICULTURIST.  67 

summer.  Back  of  the  house  was  a  little  garden,  where  in  the 
rich  black  soil,  the  man,  or  more  likely  his  wife,  planted  each 
spring  time,  a  few  garden  seeds.  There  were  two  or  three 
rows  of  beets,  some  onions,  beans,  a  few  hills  of  potatoes  and 
corn.  The  fertility  of  the  soil  allowed  them  to  hold  their  own 
against  the  rank  growth  of  weeds.  With  the  advent  of  sum- 
mer the  allurements  of  the  nomadic  life  overcame  the  home 
desires  of  the  planters.  They  evidently  entered  their  canoe 
and  followed  the  game  northward,  to  return  in  the  fall.  This 
is  the  beginning  of  agriculture  everywhere.  It  is  not  entered 
upon  with  a  definite  purpose  of  gaining  a  livelihood,  but  to  eke 
out  subsistence.     It  is  the  agriculture  of  the  nomad. 

The  Growth  of  Agriculture. — Agriculture  commences 
with  the  cultivation  of  an  open  patch  of  alluvial  soil.  It 
then  extends  to  the  cultivation  of  an  enclosed  space  or  gar- 
den. Up  to  this  point  the  process  of  tillage  is  rude  and  inef- 
fective. The  agricultural  implement  is  a  sharpened  stick  or 
spud,  with  a  fire  hardened  point.  It  develops  finally  into  a 
sapling  with  protruding  arms  where  the  branches  have  been 
cut  off.  This  is  dragged  over  the  ground  by  the  cultivators 
themselves.  Field  agriculture,  by  means  of  a  plow  drawn  by 
animal  power,  is  a  comparatively  modern  art.  Sometimes  the 
necessities  of  the  domestic  animals  encourages  cultivation. 
Such  would  be  the  case,  however,  only  in  those  instances 
where  the  pastoral  life  reaches  a  high  degree  of  perfection. 

The  Agricultural  Stages. — We  may  here  state  in  their 
order  the  various  agricultural  stages,  down  to  the  present. 
Although  such  statement  involves  matters  not  properly  con- 
nected with  the  economic  stage  which  we  are  now  studying, 
yet  the  desirability  of  presenting  the  subject  connectedly  will 
offset  an  objection  of  that  character.  Economic  facts  of  this 
kind,  moreover,  will  bear  repetition  and  may  be  mentioned 
again  when  reached  in  their  proper  place.  The  agricultural 
stages  are  as  follows: 

1.  For  want  of  a  more  expressive  term  the  first  stage  may  be 
called  the  tentative  stage.  In  this  stage  men  do  not  plant  and 
till  with  a  preconceived  design  of  procuring  a  stated  addition  to 
their  food  supply.     They  employ  no  method  and  practice  no 


68  DESCRIPTIVE  ECONOMICS. 

art  by  rule.  The  tillage  is  desultory.  The  location  and  extent 
of  the  ground  which  is  cultivated  depends  upon  the  existence  of 
open  patches  of  soil,  usually  alluvial.  It  may  be  on  the  moun- 
tain side,  m  the  wash  of  streams,  at  the  mouths  of  rivers.  The 
shape  of  the  cultivated  patch  is  irregular  following  the  contour 
of  the  forest  opening.  It  is  cultivation  in  hills  or  groups.  The 
hills  are  planted  here  and  there,  without  order,  wherever  the 
savage  thinks  the  plants  will  grow.  The  utter  absence 
of  any  plan  reminds  one  of  the  early  native  Florida  orange 
groves,  in  which  the  trees  are  found  growing  without  reference 
to  order,  as  though  the  seeds  had  been  dropped,  or  the  young 
trees  set,  by  chance.  The  planting  is  done  as  a  byplay  or 
diversion  at  the  beginning  of  the  season  of  vegetation  and  the 
plants  are  left  to  care  for  themselves  until  the  approach  of  a 
time  of  need  drives  the  planters  to  an  examination  of  the  crop. 
The  crop  is  the  common  property  of  the  community  and  is 
harvested,  if  there  is  a  harvest,  into  a  common  granary. 

2.  The  second  stage  is  the  open  field  culture.  We  have 
leaped  over  centuries  in  passing  from  the.  first  stage.'  They 
are  the  centuries  during  which  men  have  been  acquiring  knowl- 
edge of  the  fact  that  by  systematic  agriculture,  they  can  pro- 
cure a  stated  and  suflBcient  food  supply.  The  quantity  of  land 
tilled,  as  compared  with  the  population  of  the  community,  has 
been  gradually  enlarged.  By  slow  degrees,  method  has  been 
introduced  and  husbandry  developed.  Very  irregular  method 
we  should  call  it  when  placed  beside  our  modern  standard,  but 
a  great  improvement  upon  the  absolute  lack  of  method  in  the 
first  stage.  The  cultivated  land  is  the  common  property  of  the 
village  community.  Stretching  away  from  the  village,  sometimes 
from  all  sides,  are  the  common  fields.  At  first  they  are  worked 
in  common.  Afterwards  they  are  parceled  out  in  equal  shares 
among  the  members  of  the  village.  Custom  regulates  the 
allotment  from  year  to  year.  In  case  more  than  one  kind  of 
crop  is  raised,  custom  determines  the  particular  kind  of  crop 
to  which  each  allotment  shall  be  applied.  The  hitherto  undi- 
vided, though  irregular  fields,  are  now  subdivided  into  unen- 
closed patches  or  segments  corresponding  to  the  allotments. 
Often  the  chief  or  lord  of  the  village  gradually  comes  to  get  a 


THE  AGRICULTURIST.  69 

larger  allotment  than  the  others  and  becomes  entitled  to  have 
his  ground  worked  by  them,  or  to  receive  a  portion  of  their 
crops,  in  return  for  the  privilege  of  the  holding.  The  time 
comes  when  the  members  of  the  village  have  a  proprietary 
interest  in  their  patches  of  soil  and  the  right  to  sell  their 
improvements.  Allotments  cease.  The  pasturage  is  still  com- 
mon however.  It  is  on  the  other  side  of  the  village,  or  beyond 
the  cultivated  fields.  Each  villager  is  entitled  to  pasture  so 
many  beasts  on  the  common  pasture.  Common  pasturage 
exists  for  centuries  after  the  cultivated  lands  have  become  pri- 
vate property.  It  is  "the  commons"  of  our  day.  There  are 
still  "commons"  of  pasturage  and  of  meadow  land  on  the  east- 
ern end  of  Long  Island  and  in  parts  of  New  England. 

3.  The  chief  feature  of  the  third  agricultural  stage  is  the 
enclosed  field.  Of  course,  prior  to  this,  small  patches  have 
been  enclosed,  adjacent  to  the  villages,  for  horticultural  and 
gardening  purposes.  The  enclosures  are  to  keep  out  the  cattle 
when  they  are  driven  in  from  the  pastures.  There  are  frequent 
instances,  moreover,  of  enclosures  being  made  to  keep  out  wild 
beasts,  long  before  the  community  has  reached  the  stage  of 
field  agriculture.  Field  agriculture  is  sometimes,  in  its  begin- 
ning, a  system  of  alternate  cropping  and  pasturing,  similar  to 
the  "convertible  husbandry"  which  attended  the  agrarian 
revolution  in  England.  It  marks  a  breaking  away  from  the  one 
crop  system  and  the  introduction  of  varied  agriculture.  Where 
land  is  held  by  tenure,  as  is  case  of  conquest,  the  cultivation 
is  similar  to  that  of  the  third  stage. 

4.  The  fourth  and  present  agricultural  stage  is  the  rotation 
of  crops  stage.  It  includes  the  raising  of  many  different  kinds 
of  crops  by  the  tiller  as  well  as  their  annual  rotation  from 
field  to  field.  Pasturing  for  a  season  or  two,  at  intervals  of  two 
or  three  years  between  crops,  is  usually  a  part  of  the  system. 
This  system  of  agriculture  is  such  a  matter  of  course  with  us 
that  we  are  apt  to  lose  sight  of  its  economic  importance.  It 
delays  that  exhaustion  of  the  soil  which  would  speedily  ensue 
with  continued  one  crop  tillage.  It  increases  the  average  pro- 
ductivity of  cultivated  land.  It  ensures  the  agriculturist  some 
returns  in  seasons  when  climatic  and  atmospheric  influences 


70  DESCRIPTIVE  ECONOMICS. 

prevent  some  kinds  of  crops  from  maturing.  In  other  ways  it 
enlarges  the  stated  food  supply  of  the  world.  We  can  hardly 
understand  the  present  economic  condition  of  mankind  and 
appreciate  its  superiority,  without  knowing  what  it  has  been 
and  how  it  has  come  from  inferior  beginnings.  To  this  end 
the  plan  we  are  pursuing  has  its  advantages. 

Thus  in  a  general  way,  the  various  stages  in  agriculture 
have  been  presente(J.  The  descriptions  which  have  been  given 
are  intended  to  apply  to  the  average  so  as  to  be  good  the  world 
over.  If  we  were  to  state  and  describe,  for  instance,  the  agri- 
cultural stages  through  which  England  and  its  people  have 
passed,  without  reference  to  other  parts  of  the  earth,  more 
details  would  be  necessary  and  the  statements  could  not  be  so 
general. 

The  Second  Victory  over  Nature. — We  have  called  the 
domestication  of  animals  the  first  pronounced  victory  of  man 
over  the  forces  of  nature.  The  cultivation  of  plants  for  food 
is  his  second  great  victory.  Until  he  has  become  an  agricul- 
turist, man  never  realizes  the  possibility  in  store  for  him,  of  a 
certain  and  unlimited  supply  of  food.  When  he  finds  that  he 
can  till  the  earth  and  grow  the  cereals  and  cultivate  plants,  to 
an  extent  limited  only  by  the  existence  of  the  arable  soil,  there 
dawns  upon  him  the  idea  that  he  is  no  longer  the  slave  of 
natural  forces,  to  be  baffled  by  drought  killing  the  pasture,  by 
winter,  destroying  game  and  the  herds.  He  looks  at  mother- 
earth  and  sees  the  possibility  of  a  great  and  sure  food  supply. 
He  tfikes  naw  heart,  and  thenceforth  commences  a  career  of 
real  material  prosperity. 

Enlargement  of  Habitat. — When  men  enter  the  pastoral 
state,  the  sphere  of  their  economic  activity,  as  compared  with 
that  of  the  hunter  state,  is  indefinitely  enlarged.  With 
the  advent  of  the  agricultural  life  the  whole  earth  becomes 
man's  dominion.  He  has  then  finally  solved  the  question  of 
his  supremacy  on  the  earth.  His  control  over  the  production 
of  food,  so  far  as  the  enlargement  of  source  is  concerned,  has 
reached  its  practical  climax.  It  is  easy  to  find  illustrations  of 
the  relative  high  economic  condition  of  a  people  living  in  the 
agricultural  state,  as  compared  with  a  people  living  in  the  lower 


THE  AGRICULTURIST.  71 

hunter  state.  The  Navajos  and  Mohaves  have  the  same  ethnic 
origin  as  the  Apaches.  They  are  traced  back  to  a  common 
ancestry.  The  Navajos  and  Mohaves  are  in  the  hunter  state. 
They  are  brutish,  stunted  and  degraded.  They  are  arrant,  lazy 
cowards.  The  Apaches  have  a  nascent  agriculture,  and  do  not 
depend  wholly  upon  the  chase.  They  have  a  varied  diet  and  a 
source  of  supply  when  natural  sources  fail.  They  are  of  well 
developed  physique  and  are  active  and  brave,  as  bravery  goes 
there.  The  privations  described  by  Stanley  in  his  march  through 
the  great  central  African  forest  are  of  periodical  occurrence 
among  non-agricultural  and  nomadic  people.  Of  such  is  their 
daily  history.  When  Stanley  and  the  remnant  of  his  band 
passed  out  of  the  forest  into  the  open,  however,  and  came  in 
sight  of  the  fields  of  maize,  good  cheer  and  plenty  were  assured. 
Increase  of  Population. — So  far,  the  existence  of  men 
has  been  precarious.  That  fact  has  been  constantly  kept  in 
view  and  reiterated.  The  growth  of  population  has  pressed  so 
closely  upon  the  means  of  subsistence  that  hunger  and  want 
are  common  and  ordinary  conditions.  Getting  a  living  is 
fraught  with  so  much  toil  and  uncertainty,  and  so  connected 
with  privation  and  hardship,  that  only  the  strong  and  the 
robust  can  survive.  The  death  rate  is  high  and  the  period  of 
life  is  short.  Artificial  means  are  employed  to  check  the 
growth  of  population  and  reduce  the  numbers  of  the  com- 
munity. Among  many  peoples,  as  soon  as  age  or  disease 
renders  a  member  of  the  community  incompetent  to  take  care 
of  himself  and  help  the  others,  it  is  considered,  that  as  a  matter 
of  course,  his  sphere  of  activity  is  ended.  Among  the 
Esquimaux,  a  snow  hut  is  constructed  at  a  distance  from  the 
family  habitation  and  there  the  sufferer  is  taken.  A  litttle 
food  is  placed  beside  him  and  the  entrance  to  the  hut  is  blocked 
up.  There  is  one  less  mouth  in  the  community  to  feed.  The 
victim  faces  death  stoically  because  to  him  it  appears  to  come 
in  the  natural  order  of  events.  Lack  of  subsistence  and  the 
difficulty  of  procuring  it  are  doubtless  the  original  incentives 
for  the  common  practice  among  savage  and  barbarous  peoples 
of  exposing  the  sick  and  aged  to  death.  Cannibalism  and 
infanticide  may  be  attributed  to  poverty  of  food  supply.     They 


73  DESCRIPTIVE  ECONOMICS. 

have  existed  in  all  primitive  societies.  With  the  advent  of  the 
agricultural  life  and  with  it  the  cultivation  of  cereals  and 
plants,  savage  practices  become  less  frequent,  and  the  condition 
of  savagery  is  ameliorated.  The  capacity  of  a  given  territory, 
to  support  population,  is  indefinitely  enlarged.  The  land 
required  by  the  hunter  to  sustain  himself  and  family  is  meas- 
ured by  square  leagues ;  that  of  the  herdsman  by  square  miles ; 
with  the  agriculturist  it  is  measured  by  acres,  and  where  inten- 
sive agriculture  is  practiced,  as  in  some  portions  of  India  and 
Ohiua,  it  is  measured  by  square  rods. 


THE    VILLAGE   COMMUNITY.  73 


CHAPTER  II. 

THE     VILLAGE     COMMUNITY. 

Home  Making. — The  Scandanavian  legend,  with  which 
the  last  chapter  opened,  indicated  that  the  agricultural  life 
introduces  an  economic  activity  higher  than  any  which  exists 
previously.  It  denotes  a  higher  civilization,  and  the  higher 
civilization  drives  out  the  lower  civilization  which  precedes  it. 
Pastoral  life  and  a  pastoral  people  disappear  before  the  advance 
of  the  agricultural  life.  But  the  beginning  of  the  agricultural 
life  represents  the  beginning  of  a  still  more  important  economic 
movement.  It  ushers  out  the  nomadic  life  and  introduces  the 
fixed  community  life.  From  the  moment  when  the  herdsmen 
and  hunters  begin  to  till  the  soil,  they  begin  to  settle  down 
and  enter  upon  the  process  of  home  making.  They  commence 
to  have  an  abode.  Economic  activity  becomes  localized  and 
fixed.  Having  once  habituated  themselves  to  a  chosen  spot, 
the  associations  connected  with  it  give  rise  to  pleasures  in  the 
minds  of  men  which  are  lastingly  felt  and  which  develop  into 
ties  of  exceeding  strength.  The  result  is  a  nobler  mental 
activity  and  a  tremendous  effort  to  advance  the  material  wel- 
fare. The  house  is  no  longer  a  temporary  hut.  It  becomes  a 
summer  and  winter  residence.  It  gives  its  owner  a  sense  of  his 
own  importance.  "  The  eflfect  of  a  framed  or  stone  house  is 
immense  on  the  tranquility,  power,  and  refinement  of  the 
builder."  It  conveys  to  him  a  sense  of  personal  security  and 
guarantees*  him  the  enjoyment  of  his  private  property,  and 
security  in  the  enjoyment  of  person  and  in  the  possession  of 
property  are  the  first  requisites  of  growth  into  the  higher 
economic  stages  out  of  the  lower. 

Ecoiioniic  Dependence  In  the  Community  Life. — It  is 
no  longer  simply  that  community  of  living  which  prevails  in 
the  nomadic  life.  It  is  not  only  community  of  living  but 
much  more.     It  involves  some  mutual  economic  interdepend- 


74  DESCRIPTIVE  ECONOMICS. 

ence.  The  time  has  come  when  each  family  ceases  to  be 
economically  sufficient  unto  itself.  It  ceases  to  be  the  economic 
unit.  There  is  some  dependence  of  each  family  of  a  commu- 
nity upon  the  other  families.  The  family  has  now  come  to  be 
the  small  household  of  closely  related  individuals.  The  mem- 
bers become  dependent  upon  members- of  other  families  for  the 
satisfaction  of  their  economic  wants.  The  community  itself 
may  Be  isolated  from  all  other  communities  but  the  economic 
isolation  of  the  families  or  domestic  groups,  begins  to  disappear. 
The  village  itself  is  the  economic  unit.  Its  economic  condition 
is  similar  to  that  of  the  nomadic  band,  or  to  the  enlarged 
household  common  to  nomadic  life.  The  agricultural  life  may 
not  be  solely  responsible  for  the  village  community  life,  but 
when  the  nomadic  life  is  found  to  be  disappearing  and  the  fixed 
community  life  succeeding  it,  accompanied  by  tillage  as  a 
source  of  subsistence,  it  is  fair  to  say  that  in  such  cases  the  intro- 
duction of  the  art  of  cultivation  is  the  primary  and  controlling 
cause  for  the  assumption  of  the  fixed  abode.  The  purposes  of 
mutual  protection,  however,  are  frequently  present  and  operate 
to  encourage  fixed  community  life. 

The  Selection  of  Village  Sites. — The  hunter  and  the 
herdsman  know  where  the  richest  virgin  soil  prevails.  They 
know  where  vegetation  is  the  rankest ;  where  the  pasture  is 
always  the  greenest  and  where  the  herbivores  prefer  to  roam 
because  the  fare  is  best.  They  observe  topography  in  their 
wanderings  and  when  the  time  arrives,  in  the  course  of  nature, 
for  the  band  to  settle  down  and  commence  a  rude  cultivation 
of  the  soil,  it  is  easy  to  select  the  most  favorable  and  desirable 
spot.  The  first  settlements,  therefore,  are  upon  the  most 
favorable  locations.  The  rich  alluvial  soil  yields  the  best 
returns  and  requires  the  least  manipulation  in  the. process  of 
cultivation.  It  is  often  said  that  the  poorest  land  is  first  culti- 
vated and  that  the  mountain  sides  and  tops  offer  the  best 
inducements  to  the  first  cultivators,  who  have  neither  the  tools 
or  the  strength  to  clear  forests.  This  is  only  partially  true. 
The  mountain  dwellers  and  the  inhabitants  of  the  barrens  are 
usually  the  last  to  practice  agriculture.  The  deltas  of  rivers, 
especially  in  the  eastern  hemisphere,  have  been  the  scenes  of 


THE   VILLAGE   COMMUNITY.  75 

agricultural  beginnings.  Even  weak  beginners  in  agriculture 
do  not  hesitate  to  attack  a  forest,  if  soil  and  location  are  favor- 
able. The  early  Florida  settlers  found  that  they  would  make 
no  mistake  in  locating  upon  the  abandoned  Indian  fields. 
These  fields  are  scattered  throughout  the  entire  southern  por- 
tion of  the  state.  They  are  covered  with  second  growth  timber 
which  has  sprung  up' since  they  were  abandoned.  They  are 
sure  to  embrace  the  richest  soil  and  to  occupy  the  most  advan- 
tageous locations,  topographically,  for  agricultural  pursuits.  If 
there  is  any  spot  in  a  neighborhood  likely  to  be  free  from 
frost,  it  is  an  old  Indian  field. 

The  Village  Community. — Nearly  the  whole  of  Europe 
has  at  various  periods  been  dotted  by  agricultural  village  com- 
munities, and  all  European  people  have  passed  through  the 
village  community  stage  of  economies.  It  is  one  of  the  steps 
in  the  development  of  political,  as  well  as  of  industrial  society. 
In  the  natural  course  of  events  the  village  community  life  has 
superseded  the  nomadic  life  in  all  parts  of  the  world.  The 
nomadic  band  settles  down  and  commences  to  till  the  soil. 
A  village  community  is  a  group  of  families  living  in  neighboring 
abodes  and  uniting  their  forces  for  mutual  protection  and  sub- 
sistence. In  the  earlier  periods  of  village  organization  the 
homes  are  frequently  of  a  communal  character,  accommodat- 
ing a  number  of  families  or  domestic  groups  of  related  individ- 
uals. At  the  beginning  of  the  village  community  life  the 
land  is  owned  and  cultivated  in  common.  The  crops  are  har- 
vested in  common  and  placed  in  a  common  storehouse.  Later 
on  the  fields  which  stretch  away  from  the  village  are  subdivided 
and  each  family  is  given  its  alloted  parcel  or  holding.  The 
allotments  are  changed  or  re-allotment  takes  place  at  stated 
intervals.  After  the  allotment  of  holdings  each  family  may 
have  the  result  of  its  own  cultivation,  although  frequently 
obliged  to  turn  a  specific  portion  into  a  common  storehouse. 

Village  Communities  of  the  [East. — The  last  paragraph 
contains  a  brief  outline  of  the  average  village  community. 
The  community  life,  however,  has  assumed  various  forms  in 
different  places,  among  different  people.  Among  Monarchic 
tribes  there  is  a  tendency  on  the  part  of  some  of  the  villagers 


76  DESCRIPTIVE  ECONOMICS. 

to  become  serfs  subject  to  the  will  of  the  chief  or  lord.  As  serfs 
they  lose  their  original  proprietory  interest  in  the  soil.  It 
becomes  the  property  of  the  lord  and  the  serfs  are  attached 
to  it.  Among  republican  tribes  there  is  a  counter  tendency 
on  the  part  of  the  villagers  to  become  freemen  and  to  become 
owners  in  severalty  of  a  portion  of  the  surrounding  land. 
Originally  free  communities  are  frequently  the  subject  of  con- 
quest. The  members  are  allowed  to  remain  on  the  land  by 
their  conquerors  but  subject  to  the  will  of  the  latter.  The 
allotment  of  the  laud  in  such  cases  is  made  by  the  conquerors 
instead  of  being  regulated  by  the  will  of  the  community.  This 
condition  of  things  will  be  referred  Jo  in  the  next  chapter. 

Where  the  villagers  are  freemen  occupying  the  surrounding 
lands  in  common,  as  among  the  Germanic  tribes,  it  is  the  Mark 
system.  Where,  as  in  England,  in  Anglo-Saxon  times,  a  large 
portion  of  the  surrounding  land  is  cultivated,  not  as  the  prop- 
erty of  the  cultivators  but  of  the  lord,  it  is  the  Manor  system. 
By  reason  of  a  tendency  for  a  people  to  grow  out  of  the  condi- 
tion of  serfdom,  after  a  time  the  serfs  come  to  recover  a 
proprietary  interest  in  their  holdings  of  land  and  the  manor 
gradually  assumes  the  character  of  the  later  village  community 
with  a  population  of  freemen.  Many  tribes  in  the  Eastern 
hemisphere  are  in  the  village  community  stage  of  development. 
This  fact  is  specially  noticable  in  parts  of  Oceanica.  In  Russia 
the  village  community  life  is  now  at  its  perfection.  The  Rus- 
sian Mir  has  all  the  elements  of  the  universal  type. 

Village  Communities  of  the  West. — The  Western  Hem- 
isphere furnishes  good  illustrations  of  all  the  economic  states 
and  conditions  which  have  been  so  far  discussed.  All  things 
considered,  they  are  the  best  illustrations  for  our  purpose. 
The  Indian  villages  of  Zuni  or  Acoma,  as  they  exist  to-day  and 
will  doubtless  exist  for  many  years  to  come,  are  admirable 
illustrations  of  the  typical  village  community  of  the  period  of 
development  to  which  they  belong.  There  are  the  overgrown 
communal  habitations.  There  are  the  flocks  and  herds,  for 
the  most  part,  owned  in  common,  driven  out  to  the  common 
pastures  in  the  morning  and  tended  by  herdsmen  who  have 
assumed  the  employment.     Around  the  villages  are  the  little 


THE    VILLAGE   COMMUNITY.  77 

yards  and  corrals  where  the  goats  and  sheep  are  penned  at  night. 
Upon  the  outskirts  are  many  little  gardens  devoted  to  hor- 
ticulture and  vegetable  growing.  There  are  paths  leading 
away  to  the  horizon  where  are  the  common  fields.  The  heads 
of  families  receive  an  allotment  for  purposes  of  cultivation,  and 
they  may  dispose  of  their  improvements,  but  the  land  itself  is 
the  property  of  the  village.  While  the  agricultural  products 
may  be  the  individual  property  of  the  cultivator,  yet  they  are 
of  common  interest  to  all,  and  no  family  will  want  when  there 
are  provisions  in  the  village. 

These  Indian  villages  have  not  the  long,  rambling  street 
which  characterized  the  village  community  of  Europe.  House 
architecture  must  conform  to  local  circumstances  and  these 
relate  largely  to  the  question  of  security  from  marauders.  The 
villager  must  everywhere  protect  himself  from  his  nomadic 
neighbors  who  are  prone  to  harass  him  and  harry  his  stores  of 
provisions.  The  village  Indians  of  America  have  always  been 
subject  to  the  attacks  of  the  more  warlike  and  less  provi- 
dent nomadic  Indians.  The  locations  of  the  villages  have 
therefore  been  selected  with  an  eye  to  lines  of  defense,  and 
architecture  has  been  shaped  to  the  same  ends.  Otherwise  the 
economic  activity  of  the  villagers  is  not  far  different  from  that 
which  existed  in  Europe. 

Among  the  village  Indians  we  find  the  simple  crafts  which 
the  demands  of  village  economics  call  into  existence.  There 
is  the  potter  whose  art  it  is  to  fashion,  glaze  and  adorn  the 
village  pottery.  There  is  the  hand  weaver,  weaving  from  wool 
or  the  fiber  of  the  maguey.  There  is  the  wheelwright  who 
carries  on  his  occupation  rudely,  in  the  open  air.  Within  the 
houses  are  the  stone  hand-mills  where  the  grain  is  pulverized 
by  the  women.  It  appears  to  be  an  enormous  stride  in  advance 
when  the  agriculturist  has  developed  these  arts  and  industries. 
We  must  remember,  however,  that  it  took  ages  for  the  village 
Indians  to  develop  the  economic  stage  of  the  village.  If  they 
should  progress  according  to  the  course  of  nature,  the  lapse  of 
ages  would  be  required  for  the  development  of  the  succeeding 
stage.  The  Indian  village  of  Acoma  is  to-day  almost  precisely 
what  it  was  when  the  first  Spanish  explorer  saw  it  in  1540.     Its 


78  DE8CRTPTIVE  ECONOMICS. 

people  have  added  to  their  stock  of  domestic  animals  the 
varieties  brought  by  the  new  civilization,  but  otherwise  three 
and  a  half  centuries  have  not  changed  its  main  economic  char- 
acteristics. The  men  go  about  with  the  same  boomerangs 
sticking  in  their  belts.  They  kill  hares  with  a  club  to-day  just 
as  of  yore.  The  women  weave  and  wear  the  same  clothing  of 
maguey  fibre.  The  stranger  is  feasted  on  venison,  pumpkins 
and  maize  bread  prepared  in  no  different  manner.  Each  village 
is  as  sufficiently  self  supporting  and  as  economically  isolated, 
as  when  Cabeza  de  Vaca  visited  the  Pueblos  in  1535.  Their 
authentic  history,  irrespective  of  the  evidences  of  antiquity 
preserved  in  folk  lore,  furnishes  excellent  proof  of  the  slow 
development  of  the  economic  stages. 


THE  LAND  AND    THE  LABOR.  79 

CHAPTER  III. 
THE  LAND  AND  THE  LABORER. 

The  Landed  Property  of  Animals. — Some  animals  com- 
monly assert  exclusive  rights  to  the  possession  of  specific 
territory.  The  lion  selects  his  hunting  ground  and  defends 
it  against  intruders.  '*  He  puts  up  the  sign  *  no  poaching,'  and 
if  the  "warning  is  not  heeded  a  battle  takes  place."  The  terri- 
tory claimed  is,  of  course,  ill-defined.  It  is  not  described  by 
metes  or  bounds.  Some  of  the  bird  family  are  a  little  more 
definite  in  their  claims.  There  are  fishing  birds  which,  having 
chosen  a  good  fishing  ground,  drive  off  all  who  intrude  within 
a  short  flight  of  the  perch.  Pack-hunting  animals  frequently 
claim  territory  in  common.  The  wandering  dogs  of  Egypt 
unite  in  defending  the  favorite  haunts  of  the  band.  The 
Pariah  dogs  of  the  East  Indian  cities  join  their  forces  and  take 
up  their  residence  in  a  certain  quarter  of  the  city.  In  case  a 
stray  cur  comes  into  their  territory  they  make  common  cause 
in  driving  him  out.  More  intelligent  assertions  of  proprietary 
rights  in  land  seem  to  exist  among  the  anthropoid  apes. 

The  Landed  Property  of  the  Nomad. — The  assertion  of 
exclusive  rights  of  occupancy  and  possession  by  nomadic  tribes 
is  of  a  higher  nature  than  the  instinctive  assertions  of  animals. 
Nomadic  tribes  develop  a  vague  notion  of  tribal  possessions 
at  an  early  economic  stage.  At  first  it  means  the  exclusive 
right  to  roam  and  hunt  within  certain  customary  limits.  Usage 
finally  establishes  a  right  to  the  spontaneous  fruits  of  the 
territory  and  an  exclusive  right  of  pasturage.  In  the  end  the 
arable  soil  becomes  the  property  of  the  tribe.  The  boundaries 
of  the  tribal  territory  depend  at  first  on  the  extent  to  which 
the  band  roams.  This  in  turn  is  affected  by  its  numbers 
and  the  quantity  of  subsistence  required.  The  tribal  posses- 
sions are  finally  circumscribed  by  mountain  chains,  valleys, 
rivers  and  the  edges  of  plains.     Imaginary  boundary  lines  are 


80  DESCRIPTIVE  ECONOMICS. 

not  yet  in  vogue.  Possession  is  retained  only  at  the  point  of 
the  spear  and  lines  of  demarcation  are  selected  wholly  with 
reference  to  their  strategic  advantages. 

Land  for  its  Own  Sake. — In  the  last  chapter  there  was  an 
attempt  to  show  how  the  advent  of  the  agricultural  life  produces  a 
demand  for  the  arable  soil.  The  introduction  of  tillage  marks 
the  beginning  of  property  in  land  according  to  the  modern 
meaning  of  property.  Property  in  land  gives  rise  to  a  fruitful 
theme  of  economic  discussion.  Keference  was  made  to  the 
development  of  landed  property  in  the  discussion  of  the  agricul- 
tural stages,  and  it  will  be  again  referred  to.  At  this  time  it 
is  important  to  observe  that  up  to  the  period  when  the  cultiva- 
tion of  cereals  and  plants  gives  rise  to  a  demand  for  the  soil, 
for  what  it  can  produce  by  tillage  rather  than  for  its  spontane- 
ous fruits  or  its  game,  economic  activity  is  almost  wholly 
determined  by  natural  forces.  But  now  men  have  learned  to 
train  natural  forces  into  ways  that  contribute  to  their  support. 
The  spontaneous  productions  of  nature  become  secondary 
sources  of  subsistence  when  men  turn  hunters.  After  a  while 
game  becomes  secondary  to  the  milk  and  meat  subsistence  of 
the  pastoral  life.  Finally  the  milk  and  meat  subsistence 
become  subordinate  to  the  farinaceous  subsistence.  With  each 
step,  necessity  for  the  application  of  systematized  labor  be- 
comes more  imperative.  The  berry  picker  and  nut  gatherer 
are  obliged  to  expend  only  such  efEort  as  may  be  required  to 
harvest  the  spontaneous  fruits  of  the  soil.  The  hunter  and 
fisher  finds  his  labors  increased.  He  must  put  forth  more 
muscular  efEort  and  use  more  craft.  Still  greater  exertion  is 
required  of  the  herdsman.  The  flocks  and  cattle  require 
stated  attention.  Labor  assumes  the  character  of  regular  daily 
toil. 

Systematized  L.abor. — Coming  down  to  the  agricultural 
life  it  is  found  that  the  man  who  relies  wholly  or  partially  upon 
the  cultivation  of  plants  for  subsistence,  is  bound  to  engage  in 
systematic  labor.  Mankind  has  already  discovered  that  in 
order  to  satisfy  the  necessities  of  existence,  a  certain  amount 
of  work  is  required.  It  is  a  principle  applicable  to  all  living 
things.     *'The  seed  has  to  toil  to  raise  its  covering,  the  hard- 


THE  LAND  AND    THE  LABOR.  81 

ened  crust  of  the  earth,  and  then  breathe  the  air  and  feel  the 
light.  While  clinging  to  its  bed  the  oyster  opens  and  closes  in 
order  to  draw  from  the  surrounding  water  the  first  elements  of 
nourishment.  The  spider  spins  its  web,  the  fox  and  wolf 
labor  while  they  hunt  their  prey.  Man  is  not  exempt  from  this 
universal  and  voluntary  law."  The  labor  of  man,  however,  is  a 
conscious  and  voluntary  act.  That  of  animals  is  unconscious 
and  instinctive. 

The  agriculturist  is  obliged  to  do  more  than  those  who  have 
preceded  him  in  the  order  of  economic  development,  because 
he  must  reclaim  the  wild  land.  In  most  cases  it  is  necessary 
for  him  to  clear  away  the  forests.  He  must  plant  his  seeds 
with  the  season,  and  must  exercise  intelligent  patience  while 
he  is  working  and  waiting  for  the  harvest.  He  must  hoe  and 
irrigate  and  in  many  ways  seek  to  control  nature's  subtle  forces 
in  order  to  secure  their  co-operation  and  procure  a  crop. 

A  Division  of  Employments,  is  one  of  the  important 
results  of  the  agricultural  life.  The  daily  duties  have  become 
diverse  and  complicated,  and  require  skill  and  training.  Some 
of  the  agricultural  operations  require  man's  undivided  atten- 
tion. There  are  so  many  ''irons  in  the  fire,"  that  one  mind 
cannot  care  for  them  all.  One  man,  therefore,  looks  after  the 
crops,  and  another  tends  the  herds.  The  distinctions  of  occu- 
pation, slight  at  first,  gradually  become  pronounced.  The 
advantage  of  a  division  of  employments  relates  first  of  all  to 
the  skill  in  one  direction  which  is  acquired  by  the  man  who 
devotes  himself  to  one  kind  of  labor.  The  herder  acquires 
some  technical  knowledge  of  the  structural  organization  of  the 
various  domestic  animals  and  is  better  prepared  to  treat  their 
diseases  and  give  them  the  special  care  which  emergencies  may 
require.  The  farmer  learns  the  peculiarities  of  different  seeds 
and  acquires  special  knowledge  of  the  conditions  of  germina- 
tion. 

The  Service  of  Others. — The  village  life  and  pursuit  of 
agriculture  give  rise  to  another  important  change.  Hitherto 
all  men  have  been  under  equal  obligations  to  labor.  Each  man 
has  performed  his  share  in  the  common  industries.  The 
material  condition  of  each  of  the  members  of  the  family  and  of 
6 


82  DESCRIPTIVE   ECONOMICS. 

the  tribe,  was  precisely  the  same.  The  time  comes  when  some 
members  of  the  community  have  more  work  to  be  done  than 
they  can  do  themselves.  Thay  require  the  service  of  others  as 
one  of  their  economic  wants.  On  the  other  hand,  there  are  a 
few  members  whose  share  of  property  is  so  small  that  the  utili- 
zation of  it,  by  their  personal  labor,  will  not  suffice  to  support 
them.  They  must  enter  into  the  service  of  the  more  fortunate 
members.  Possession  or  non-possession  of  land  appears  to 
give  rise  to  the  primary  distinctions  of  class.  There  is  a  limit 
to  the  quantity  of  land  which  may  be  the  subject  of  use  and 
ownership  and  unless  it  is  divided  into  smaller  holdings  as 
population  grows,  some  must  go  without.  There  are  many 
theories  in  explanation  of  the  fact  that  one  part  of  mankind 
gets  the  land  and  accumulates  more  upon  it  than  can  be  per- 
sonally managed,  and  another  part  is  landless,  fails  to  accumu- 
late and  is  obliged  to  serve  the  fortunate  part  for  wages.  As 
one  of  the  facts  of  economics,  further  reference  will  be  made 
to  it  in  the  chapter  on  the  Kise  of  Economic  Classes. 

Tlie  Evolution  of  L<anded  Property. — Something  wa£ 
said  in  a  preceding  chapter  about  the  growth  of  landed  prop- 
erty incident  to  the  enumeration  of  the  various  agricultural 
stages.  The  subject  may  now  be  discussed  upon  its  merits, 
and  with  reference  to  its  own  economic  character.  An  excel- 
lent review  of  the  historicp,l  evolution  of  landed  property  has 
been  prepared  by  Gide.  It  appears  in  his  Principles  of  Politi- 
cal Economy,  and  will  be  closely  followed. 

Five  Stages  of  Evolution.-  There  are  five  stages  or  phases 
of  development  of  private  property  in  land.  Each  has 
appeared  in  sufficiently  numerous  instances  to  warrant  men- 
tion, although  it  does  not  follow  that  the  succession  of  stages 
has  invariably  occurred.  It  sometimes  happens  that  some  one 
phase  has  never  appeared  in  the  land  economy  of  a  country. 

1.  Communal  or  Collective  Ow7iersliip. — In  the  first  stage  the 
land  belongs  to  the  tribe  or  community.  At  the  beginning  of 
the  stage  it  is  cultivated  in  common,  and  every  man  expends 
an  equal  amount  of  labor  in  the  common  cultivation,  and  the 
products  are  owned  and  used  in  common. 

2.  Periodical  Allotment  of  Use  and  Possession. — In  the  sec- 


THE  LAND  AND    THE  LABOR.  83 

ond  stage  "the  population  has  ceased  to  be  nomadic,  and  has 
assumed  the  character  of  a  fixed  community.  The  soil  having 
been  made  arable  and  brought  under  cultivation,  is  no  longer 
abandoned  to  suit  a  change  of  location,  but  its  cultivation  is 
continued  according  to  customary  and  more  productive  meth- 
ods. The  arable  soil  belonging  to  the  community  is  subdi- 
vided, and  the  temporary  possession  of  a  portion  is  given  to 
each  head  of  a  family.  The  land  itself  is  the  property  of  the 
community  at  large,  and  the  various  subdivisions  are  changed 
by  allotment  at  stated  periods.  The  temporary  possession  is 
perhaps  at  first  for  a  single  season — the  time  embraced  in  the 
ordinary  cycle  of  agricultural  operations.  The  process  of  cul- 
tivation is  regulated  also  by  custom  which  fixes  the  character 
of  the  crop  to  which  each  holder  shall  apply  his  allotment. 
The  plan  of  periodical  division  among  the  heads  of  families  is 
still  practiced  in  the  Mir,  the  village  community  of  Russia. 
The  distribution  has  there  become  biennial.  The  portion  of 
the  common  territory  upon  which  the  houses  are  built,  together 
with  the  gardens  connected  with  them,  is  the  hereditary  prop- 
erty of  the  village  and  not  subject  to  division.  The  meadow 
land  is  parceled  out  along  with  the  crop  land.  The  pasture 
land  remains  the  common  property  of  the  community,  each 
member  being  entitled  to  a  certain  quantity  of  pasturage. 

3.  Permanent  Possession  wWiout  Right  of  Disposal, — The 
realloting  of  the  land  becomes  less  frequent.  The  possession 
of  the  householder  lasts  for  a  longer  period.  The  more  skill- 
ful cultivators  of  the  community  bring  their  allotments  into  a 
higher  state  of  cultivation  than  the  others  and  endeavor  to 
postpone  the  re-allotment  as  long  as  possible.  Finally  the 
periodical  division  falls  into  disuse,  and  the  householder  and 
his  family  as  a  unit,  become  entitled  to  the  permanent  use  and 
possession  of  their  last  allotment.  The  title  to  the  soil,  how- 
ever, for  a  long  time  afterward  is  vested  in  the  community  at 
large,  and  the  right  of  disposal  does  not  pass  with  the  perma- 
nent right  of  possession.  This  system  exists  among  the  family 
communities  of  eastern  Europe,  especially  in  Bulgaria  and 
Croatia. 

4.  TJie  Tenure  Holding. — The  fourth  stage  has  been  ascribed 


84  DESCRIPTIVE  ECONOMICS. 

to  accident,  rather  than  to  evolution.  It  is  an  accident,  how- 
ever, which  has  occurred  so  uniformly  among  all  human  socie- 
ties, as  to  become  a  phase  of  the  evolution  of  landed  property. 
It  relates  to  the  conquest  of  one  people  by  another.  The  con- 
querers  appropriate  the  land  of  the  conquered  territory  and 
assert  the  legal  ownership  of  the  soil.  The  conquered  are  left 
in  possession  by  what  is  called  tenure.  The  tenure  is  more  or 
less  akin  to  actual  ownership,  but  is  limited  by  such  conces- 
sions as  the  conquerors  may  make  to  the  cultivators,  and  is 
burdened  by  the  servitudes  which  the  conquerors  impose.  The 
condition  of  the  original  inhabitants  is  that  of  serfdom,  which 
is  described  in  a  succeeding  part  of  this  chapter. 

5.  The  Freeliold. — The  fifth  stage  witnesses  the  full  develop- 
ment of  private  ownership.  It  becomes  a  freehold,  alienable 
by  the  owner  at  will.  In  this  stage  the  old  feudal  system  of 
tenure  disappears,  and  with  it  also  communal  or  collective 
ownership.  Individualism  completely  supersedes  communism. 
It  comes  to  pass  by  the  end  of  the  city  stage  of  economics, 
although  the  transfer  of  land  is  hampered  by  many  restrictions 
which  are  cleared  away  in  the  succeeding  stages. 

A  Sixth  Stage  is  claimed  to  be  necessary  in  order  to  complete 
the  process  of  evolution.  The  required  condition  of  things 
relates  more  to  the  transfer  of  land  from  hand  to  hand,  from 
one  owner  to  another,  than  to  its  ownership.  In  this  stage 
landed  property  will  be  disposed  of  as  easily  as  any  article  of 
personal  property.  It  is  claimed  that  the  Torrens  land  system 
adopted  in  the  Australian  colonies,  is  a  realization  of  this  final 
step.  By  the  Torrens  system  "the  owner  of  real  estate  is  able  as 
it  were  to  docket  his  land  in  the  shape  of  a  sheet  of  paper,  and 
to  transfer  it  from  one  person  to  another  with  the  same  ease  as 
if  it  were  a  banknote,  or  at  least  a  bill  of  exchange." 

Communal  Versus  Individual  Ownership. — The  discus- 
sion of  communism  belongs  to  a  later  part  of  the  work.  While 
the  subject  of  the  development  of  property  is  so  fresh  in  mind 
however,  it  is  possible  to  picture  in  a  few  words  the  basis  of  the 
doctrine  of  communism,  or  collectivism  as  its  teachers  now 
prefer  to  call  it.  The  word  property  has  become  so  intimately 
associated  with  the  idea  of  land  that  the  term  "development 


THE  LAND  AND   THE  LABOR.  85 

of  property"  usually  stands  for  the  development  of  private 
ownership  of  land.  The  communistic  theory  denies  that  any 
individual  has  the  right  to  appropriate  a  part  of  the  domain  of 
nature  which  was  created  for  all  men  alike.  Therefore  the 
land  should  be  held  and  used  for  the  common  benefit  of  all, 
and  the  primitive  ownership  by  the  community  is  the  only  just 
organization.  The  subject  narrows  down  to  these  questions: 
Is  the  course  of  landed  property,  resulting  in  its  becoming  the 
free  and  exclusive  property  of  individuals,  a  just  and  natural 
course,  or  has  it  been  due  to  coercive  and  iniquitous  human 
institutions,  perverting  the  course  of  nature?  Is  it  just  that 
individuals  should  seize  upon  what  was  originally  common  and 
make  it  the  subject  of  private  ownership?  Is  private  owner- 
ship right?  Should  the  primitive  collective  ownership  of  the 
community  at  large  be  reinstituted  by  society  and  how? 

Slavery. — It  is  necessary  to  go  back  a  little  now,  for  in  the 
order  of  development,  slavery  precedes  the  hiring  of  service. 
It  usually  begins  with  the  fixed  community  life.  Nomads 
cannot  conveniently  carry  slaves  about  with  them,  and  neither 
the  hunting  or  the  pastoral  tribe  has  much  for  a  slave  to  do. 
To  the  agriculturist,  however,  with  whom  labor  assumes  such 
importance,  an  able-bodied  laborer  is  an  object  of  interest. 
After  having  settled  down  into  a  fixed  community  life  men  can 
look  after  slaves  and  find  daily  use  for  them.  At  first,  like 
other  objects  which  are  the  subject  of  ownership  in  early  times, 
the  slaves  are  the  common  property  of  the  community.  They 
labor  for  the  community  at  large.  The  villager  with  his  com- 
mon interest  in  the  lands,  provisions,  and  slaves  becomes  a 
capitalist,  and  the  slave  the  laborer.  There  is  no  collision 
between  capital  and  labor,  however,  because  the  slave  is  both 
the  capital  as  well  as  the  laborer.  The  agricultural  community 
life,  then,  is  responsible  for  another  great  economic  change. 
Prior  to  it  no  man  is  master  and  no  man  is  servant.  Now 
comes  the  slave  serving  a  master  and  after  him  the  servant  in 
the  hire  of  an  employer. 

Serfdom  is  said  to  originate  in  two  ways.  First,  by  the 
conquest  and  subjugation  of  the  originally  free  inhabitants  of 
a   country,  and    secondly,    by  the  natural  growth   of  mon- 


86  DESCRIPTIVE  ECONOMICS. 

archical  institutions.  Arising  in  the  first  way  it  is  an 
amelioration  of  the  lot  of  slavery.  When  a  whole  country  is 
conquered  the  conquerors  cannot  well  convert  the  entire  popu- 
lation into  personal  slaves.  The  country  is  parceled  out  among 
the  victors  and  as  part  of  the  spoils  the  original  dwellers  go 
with  the  soil.  Thenceforth  they  belong  to  it,  and  while  not 
considered  the  personal  j^roperty  of  the  lord  or  owner  of  the 
soil,  yet  they  are  under  his  authority  and  cannot  leave  his 
domain  without  his  consent. 

Originating  in  the  second  way,  serfdom  is  a  natural  growth 
within  the  tribe.  It  is  assumed  that  there  is  a  time  when  civil 
equality  prevails.  The  political  affairs  of  the  tribe  are  managed 
by  elective  chiefs.  The  elective  chiefs  gradually  become  hered- 
itary and  the  chieftainship  arises  not  by  election  by  the  mem- 
bers of  the  tribe  but  by  descent  or  succession.  The  hereditary 
chiefs  assert  unto  themselves  greater  and  greater  authority 
over  the  hitherto  common  lands  until  finally  it  is  parcelled  out 
wholly  according  to  their  wills.  The  allotments  are  held  at 
their  pleasure  and  the  holding  is  a  tenure.  Whatever  doubt 
^nay  exist  as  to  the  true  origin  of  serfdom,  there  is  none  as  to 
the  actual  condition  of  the  serf.  He  is  bound  to  the  soil  and 
goes  with  it  if  it  changes  hands,  like  any  fixture.  The  idea  of 
permanence  and  attachment  to  the  soil  is  the  controlling  feat- 
ure of  serfdom.  The  time  comes,  however,  when  the  lords 
begin  to  sell  liberty  to  the  serfs.  It  involves,  simply,  permis- 
sion to  depart  from  the  community  and  from  the  domain  of 
the  lord.  To  go  and  come  at  will.  At  first,  the  price  rests 
wholly  in  the  caprice  of  the  lord.  It  finally  becomes  fixed  by 
long  usage  and  a  customary  price  is  then  set  upon  the  serf's 
freedom.  It  is  paid  by  the  performance  of  labor  or  in  cattle, 
sheep  or  agricultural  products.  Those  who  do  not  gain  free- 
dom by  purchase  from,  or  gift  of,  the  lord  acquire  it  in  the 
course  of  the  natural  development  out  of  the  condition  of 
serfdom. 


VILLAGE  HOUSEKEEPING,  87 


CHAPTER  rV. 

VILLAGE  HOUSEKEEPING. 

Derivative  Meaning  of  "Economics." — The  word  eco- 
nomics is  derived  from  two  Greek  words,  oikos,  meaning  a  house- 
hold, domestic  affairs  or  the  domestic  establishment,  and  nomos, 
meaning  law  or  regulation.  Agreeably  to  its  derivation,  there- 
fore, economics  primarily  refers  to  the  government  or  regulation 
of  a  household,  and  the  art  of  housekeeping  or  regulating 
domestic  affairs.  It  would  not  be  inappropriate  therefore  to 
speak  of  the  economics  of  the  family,  as  family  housekeeping. 
The  economics  of  the  village  would  be  village  housekeeping. 
Under  the  head  of  village  housekeeping  would  come  discussion 
of  the  regulation  of  the  internal  or  domestic  affairs  of  the  vil- 
lage community. 

Village  Employments. — Agriculture  was  at  first  carried 
on  jointly  with  the  pursuits  which  had  been  followed  before 
it,  and  the  first  agriculturists  were  hunters,  fishers  and  herds- 
men, as  well  as  tillers  of  the  soil.  Each  member  of  the  family 
was  conversant  with  all  the  rude  arts  of  the  time  There  was 
little  distinction  of  sex  arising  from  occupation.  Men  took 
longer  tramps  than  the  women  when  game  was  sought  for,  but 
the  women  could  lend  a  hand  at  hunting,  and  they  tended  the 
flocks  and  looked  after  the  little  horticultural  enterprises.  The 
introduction  of  field  agriculture  gave  rise  to  employments  suit- 
able only  for  men.  House  life  and  its  incidents  becomes  more 
appropriate  to  women,  and  out-door  life  to  men.  The  men 
come  to  follow  the  bent  of  their  minds.  They  begin  to  devote 
themselves  to  different  kinds  of  labor.  Some  prove  to  be  best 
fitted  for  herdsmen,  while  others  are  natural  agriculturists, 
and  devote  themselves  to  field  labor.  These  occupations 
gradually  become  distinct.  The  great  mass  of  the  members  of 
all  village  communities  devote  themselves  to  one  of  them. 
Fishing    and  hunting  become  pastimes  with  the  majority. 


88  DESCRIPTIVE  ECONOMICS. 

There  are  a  few,  however,  in  whom  the  nomadic  spirit  is  still 
paramount.  They  decline  to  engage  in  stated  daily  labor. 
They  are  the  ne'er-do-wells  of  the  community. 

Village  Artisans. — In  the  first  economic  stage  each  family 
builds  its  house  and  makes  the  utensils  and  clothing  which  it 
requires.  When  men  come  to  engage  in  agricultural  pursuits 
upon  a  large  scale  the  necessity  for  a  few  primitive  artisans  is 
felt.  Some  rude  tools  and  appliances  are  required.  The  agri- 
culturist and  herdsman  cannot  find  time  to  learn  to  use  them, 
nor  can  each  member  of  the  community  afford  to  own  them. 
The  artisan  class  commences,  perhaps,  with  the  smith  and  the 
carpenter.  The  smith  is  a  universal  ironworker.  He  makes 
and  repairs  plows,  carts  and  cooking  utensils.  The  carpenter 
is  not  only  house-builder,  but  also  boat-builder,  cart-maker 
and  furniture-maker.  He  is  the  universal  wood-worker.  They 
possess  the  only  knowledge  of  these  arts.  The  other  men 
lose  it  or  fail  to  acquire  it.  In  the  later  stages  of  village  com- 
munity development,  each  village  contains  representatives  of 
all  the  crafts  necessary  for  the  daily  life  of  the  community  and 
to  provide  for  its  wants. 

The  Division  of  the  Profits. — It  has  been  said  that  uhere 
is  yet  no  contest  between  capital  and  labor.  The  body  of 
laborers — those  who  serve  others  for  fixed  wages — is  so  small, 
as  compared  with  the  rest  of  the  population,  that  its  voice  is 
not  heard.  The  early  villagers,  therefore,  are  all  capitalists 
as  well  as  laborers.  They  all  labor  in  the  common  undertak- 
ings and  have  a  proprietary  interest  in  the  results  of  labor. 
Each  gets  a  share  of  the  results  of  the  common  toil.  The 
herdsman  receives  so  much  meat  and  milk  from  the  herds 
which  he  tends,  while  the  surplus  goes  to  the  agriculturist  and 
the  other  members  of  the  community.  They  in  turn  pass  over 
to  the  herdsman  some  of  the  agricultural  products.  In  the 
early  stages  of  village  community  life,  the  smith  and  the  car- 
penter, and  later  on  the  wright  and  the  miller,  are  elected  or 
appointed  by  the  community,  and  are  communal  officers  occu- 
pying a  relatively  high  rank.  For  their  services  to  the  com- 
munity they  receive  a  portion  of  meat  and  grain.  The  share 
of  each  member  of  the  community,  according  to  his  rank  and 


VILLAGE  HOUSEKEEPING,  89 

needs,  is  usually  fixed  by  immemorial  custom  ana  usage.  In 
the  latter  part  of  the  village  stage,  the  landless  class  has  grown 
to  such  proportions  as  to  become  a  hostile  force  in  the  com- 
munity— hostile  to  the  citizens  or  landed  class.  The  story  of 
the  contest  between  the  two  classes  is  told  in  the  chapters 
which  follow,  under  the  head  of  "  The  Economics  of  the 
City." 

Pioneer  Peoples. — The  industrial  life  of  the  village  com- 
munity is  common  among  all  pioneer  peoples.  In  a  new  coun- 
try every  man  must,  for  a  time,  know  something  about  all  the 
arts  and  crafts.  Like  Saint  Dunstan,  who  was  a  prelate,  poli- 
tician, *'an  excellent  blacksmith,  bell  founder  and  designer  of 
ladies'  robes,"  they  must  be  able  to  turn  the  hand  to  meet  all 
the  emergencies  which  may  arise.  So  it  is  that  they  grow  the 
flax  in  the  field,  and  after  they  have  put  it  through  the  brake, 
superintend  each  manipulation  until  it  is  woven  into  clothing. 

Truck  Economy. — The  exchange  of  commodities  has  now 
become  more  comprehensive  than  the  barter  of  family  eco- 
nomics. In  the  family  stage  of  industrial  society  there  is  no 
pre-concerted  movement  toward  the  production  of  surplus 
commodities  for  the  purposes  of  barter.  Men  now  labor  to 
secure  a  surplus  of  one  or  two  of  the  articles  in  common 
demand,  with  the  intention  of  exchanging  it  for  other  articles 
which  they  require.  The  slight  division  of  employments 
which  arises  in  the  village  community  life,  creates  a  necessity 
for  the  interchange  of  commodities.  The  craftsmen  and  all 
those  members  of  the  village  not  directly  engaged  in  producing 
subsistence  of  food,  are  paid  in  truck.  They  exchange  their 
labor  for  wheat  and  milk.  At  first  there  is  no  village  store- 
keeper or  shopkeeper.  When  he  does  come  to  exist  he  is  a 
truck  dealer.     He  pays  for  commodities  with  commodities . 

The  Control  of  Village  Trade. — Just  as  the  tribe  and  the 
enlarged  household,  in  the  family  stage  of  economics, 
controlled  trade,  and  made  it  a  family  enterprise,  so  vil- 
lage communities  make  it  a  village  enterprise.  In  the  early 
stages  of  village  formation,  the  communal  life  is  almost  as 
complete  and  as  perfectly  organized  as  with  the  isolated  family. 
The  community  is  interested  in  all  that  is  produced  and  the 


90  DESCRIPTIVE  ECONOMICS. 

products  are  owned  in  common.  The  village,  therefore,  is 
naturally  interested  in  the  exchange  of  the  village  property, 
and,  very  properly,  the  community  controls  the  exchange. 
Another  reason  for  village  control  is  the  existing  lack  of  order 
and  respect  for  private  possession  of  property.  The  combined 
strength  of  the  village  is  needed  to  enforce  fair  exchanges.  In 
the  later  stages  of  village  formation,  the  idea  of  private  owner- 
ship has  developed.  Individuals  own  the  fruits  of  their  labor, 
and  greater  security  is  afforded  the  owner.  The  village  still 
controls  trade,  however,  by  and  among  its  members  and  within 
its  precincts,  for  another  reason.  That  reason  is  village 
aggrandizement.  The  activity  of  the  members  of  the  village 
is  directed  toward  the  village  welfare.  Every  member  makes 
the  common  interest  his  interest.  At  first  the  unwritten,  and 
later  the  written  laws  of  the  village  demand  that,  no  individual 
shall  trade  except  for  the  common  benefit.  The  manner  of 
making  exchanges  is  so  regulated  that  the  supposed  common 
benefit  will  be  secured.  Members  of  neighboring  villages  are 
forbidden  to  trade.  In  so  far  as  the  village  has  a  centralized 
authority  it  is  directed  toward  the  control  of  trade  for  the  ben- 
efit of  the  immediate  community  composing  its  membership. 
In  the  succeeding  chapter,  entitled  "  The  Trader,"  it  will  be 
shown  how  this  village  control  of  trade  ripens  into  a  far-reach- 
ing municipal  control,  and  trade  privileges  are  either  confined 
solely  to  citizens  or  burgesses  possessing  the  franchise  of  the 
city,  or  else  trade  regulations  are  such  as  to  give  them  a  monop- 
oly of  trade. 

The  Character  of  Village  Trade. — This  economic  stage 
affords  no  indications  of  systematic  trade.  It  is  not  like  the 
commerce  of  modern  times.  At  first  it  is  simply  an  exchange 
of  commodity  for  commodity  among  the  villagers,  necessitated 
by  their  different  employments,  and  also  by  the  increase  of 
their  wants.  Afterwards,  when  one  village  has  a  surplus  of 
some  article,  and  a  neighboring  village  experiences  a  dearth  of 
that  article,  but  has  a  surplus  of  another,  there  is  an  exchange 
of  surpluses.  It  is  inter-village  trade.  Geographical  location 
may  secure  to  one  village  a  stated  surplus  of  one  commodity 
and  keep  it  in  want  of  others.     The  inhabitants  of  a  fishing 


VILLAGE  HOUSEKEEPING..  91 

village,  for  instance,  will  have  made  economic  progress  corre- 
sponding to  that  of  the  neighboring  agricultural  villages.  They 
will  have  better  fishing  appliances  than  their  ancestors  of  the 
family  stage  of  economics.  They  will  have  more  and  higher 
wants — wants  which  the  catch  of  fish  will  not  satisfy.  They 
will  catch  more  fish  than  are  required  for  their  own  support, 
and  will  need  to  exchange  the  surplus  to  satisfy  their  other 
wants. 

The  Increase  of  Capital. — It  has  been  observed  that 
among  nomadic  peoples  there  is  little  effort  to  accumulate  cap- 
ital. Nomadic  life  forbids  the  acquisition  of  a  store  of  goods 
for  future  consumption  or  use,  and  capital  will  consist  of  the 
weapons  of  the  chase,  a  few  simple  cooking  utensils  and  the 
flocks.  There  is  no  storing  for  future  consumption.  With 
the  advent  of  the  fixed  community  life,  however,  comes  the 
tendency  to  the  production  of  commodities  for  future  employ- 
ment or  consumption.  The  instinctive  propensity  to  store, 
inherent  in  animals,  develops  in  men  and  ripens  into  precon- 
ceived design.  The  necessities  of  the  agricultural  community 
life  demand  more  capital.  There  must  be  agricultural  imple- 
ments of  which  the  nomad  had  no  need.  The  villager  confines 
the  range  of  his  operations  to  a  limited  territory.  He  does  not 
break  camp  when  the  country  does  not  provide  for  its  inhabit- 
ants, as  the  nomad  does.  Therefore,  he  must  necessarily  accu- 
mulate for  certain  times  and  seasons  when  agricultural  opera- 
tions are  at  a  standstill  and  the  earth  yields  no  increase.  The 
population  of  the  village  would  be  too  great  for  the  supporting 
capacity  of  its  territory,  if  herds  and  flocks,  combined  with 
game,  were  the  sole  reliance.  Moreover,  the  agriculturist  of 
the  fixed  community  has  entered  a  stage  of  civilization  higher 
than  that  of  the  herdsman  or  hunter.  His  wants  have 
increased  accordingly,  and  an  increase  of  capital  is  necessary 
to  satisfy  the  superior  and  increased  number  of  wants  pertain- 
ing to  the  higher  civilization.  Men  can  no  longer  procure 
each  day  the  food  of  that  day.  The  fact  that  nature  works  in 
her  moods,  and  men  living  in  the  agricultural  life  on  the  prod- 
uce of  the  soil,  must  abide  by  the  seasons,  must  wait  for  the 
seeds  to  germinate  and  fruit,  presupposes  some  accumulations 


92  •    DESCRIPTTVE  ECONOMICS. 

of  goods  for  future  consumption.  The  fact  that  there  is  a 
simple  division  of  employments,  also  presupposes  some  accu- 
mulation of  goods. 

Village  Manufactures. — From  the  fact  that  we  find  in  the 
village  community  representatives  of  the  ruder  crafts,  we 
would  naturally  expect  to  discover  some  signs  of  manufactur- 
ing industry.  The  village  craftsman,  however;  manufactures 
to  order  only.  He  is  really  more  of  a  tinker  by  trade.  He 
makes  up  the  raw  goods  which  are  brought  to  him.  Plows  are 
not  made  to  be  kept  in  stock  until  a  customer  calls.  Articles 
requiring  much  skill  or  expenditure  of  time  in  the  manufact- 
ure are  made  from  time  to  time  as  they  are  required  for  imme- 
diate use.  Manufacturing  to  a  noticeable  extent  is  not  possi- 
ble until  a  considerable  body  of  men  can  devote  themselves  to 
something  beside  agriculture,  and  we  have  seen  that  in  the  vil- 
lage community  life,  men  are  given  over  to  agriculture  and  the 
operations  incident  to  it. 


THE  FIRST  FORMS   OF  MONET.  93 

CHAPTER  V. 

THE  FIRST  FORMS  OF  MONEY 

Disadvantages  of  Truck  Economy. — Mr.  Jevons  begins 
his  book  Money  and  the  Mechanism  of  Exchange,  by  telling 
how  the  prima  donna  Mdlle.  Zelie  gave  a  concert  in  the  Society 
Islands.  Her  remuneration  was  to  be  one-third  of  the  pro- 
ceeds. When  the  receipts  of  the  box  office  were  counted  up, 
the  singer  found  that  her  part  consisted  of  a  lot  of  poultry, 
fruit  and  monkeys.  She  could  not  take  the  property  with  her 
on  her  travels,  and  had  no  use  for  it.  In  order  to  realize  any 
results  from  her  concert,  she  was  obliged  to  go  about  and  hunt 
up  people  with  whom  she  could  exchange  the  truck  for  other 
things  which  she  could  use  or  transport.  Cameron  the  African 
explorer  wanted  to  buy  a  boat  in  Africa  and  he  tells  of  the  dif- 
ficulties he  experienced  in  this  way:  "Syde's  agent  wished  to 
be  paid  in  ivory  of  which  I  had  none;  but  I  found  that 
Mohammed  Ibu  Salib  had  ivory  and  wanted  cloth.  Still,  as  I 
had  no  cloth,  this  did  not  assist  me  greatly  until  I  heard  that 
Mohammed  Ibu  Gharib  had  cloth  and  wanted  wire.  This  I 
fortunately  possessed.  So  I  gave  Ibu  Gharib  the*  requisite 
amount  in  wire;  upon  which  he  handed  over  cloth  to  Ibu 
Salib,  who  in  his  turn  gave  Syde  Ibu  Halib's  agent  the  wished- 
for  ivory.  Then  he  allowed  me  to  have  the  boat."  These  stories 
illustrate  the  disadvantages  of  truck  economy.  It  has  been 
shown  that  the  division  of  employments  which  arises  in  the 
agricultural  community  life  necessitates  some  exchange  of 
commodities.  When  the  time  comes  that  men  devote  them- 
selves to  one  kind  of  labor,  it  necessarily  happens  that  they 
must  use  the  products  of  the  labor  of  other  men,  engaged  in 
different  kinds  of  labor.  In  order  to  get  it  they  must  exchange 
the  products  of  their  own  labor.  There  must  be  some  distribu- 
tion among  the  different  members  of  the  community,  of  the 
various  community  products.      At   first   this   distribution  is 


94  DESCRIPTIVE  ECONOMICS. 

effected  by  the  actual  exchange  of  commodity  for  commodity. 
The  smith  exchanges  a  plow  for  sheep  or  some  wheat.  The 
carpenter  exchanges  the  result  of  his  work  for  clothing  and 
provisions.  The  herdsman  must  exchange  with  the  agricul- 
turist and  the  craftsman.  Observe  the  disadvantages  of  the 
system.  A  number  of  men  might  wish  to  exchange  sheep  for 
plows  and  the  smith  must  keep  his  plows  or  take  more  sheep 
than  he  needs.  If  he  takes  the  sheep  he  must  find  someone 
who  wants  sheep  and  has  a  surplus  of  flour  and  potatoes.  So 
it  goes  through  the  community.  Every  man  having  a  surplus 
of  a  commodity  must  find  another  member  of  the  community 
who  wants  that  surplus  and  who  also  has  a  surplus  of  a  com- 
modity of  the  desired  kind.  A  dozen  exchanges  may  be 
required  before  a  man  gets  what  he  wants. 

Increasing  Difficulties  witli  Increasing  Wants. — In  the 
early  stages  of  industrial  society,  when  wants  are  few  and  sim- 
ple— when  each  family  is  sufficient  unto  itself  and  each  mem- 
ber of  the  family  joins  in  contributing  to  the  common  subsist- 
ence, it  can  be  conceived  how  the  difficulties  connected  with 
the  interchange  of  commodities,  so  far  as  interchange  is  neces- 
sary, may  be  overcome.  As  society  progresses  and  wants 
increase,  and  assume  a  higher  character,  it  becomes  increas- 
ingly difficult  for  the  members  of  the  community  to  make 
satisfactory  exchanges. 

Overcoming  the  Difficulties. — The  first  attempts  at  over- 
coming or  circumventing  the  difficulties  are  rude,  yet  they  are 
fully  abreast  of  the  arts  of  life,  of  the  period.  In  very  early 
times  men  have  practiced  the  plan  of  selecting  some  one  com- 
modity as  a  measure  of  value  and  the  medium  of  exchange. 
The  commodity  selected,  to  be  employed  as  money,  is  that 
which  is  most  desired  by  the  members  of  the  community.  It 
is  that  which  a  majority  of  the  members  want.  Its  adaptation 
for  the  purposes  of  a  medium  of  exchange,  other  things  being 
equal,  depends  upon  its  divisability  and  its  value  as  compared 
with  its  bulk.  Auk  feathers  are  universally  wanted  on  the 
Labrador  coasts,  but  they  are  not  as  good  a  medium  of 
exchange  as  dried  fish,  because  of  their  bulky  nature  and  the 
difficulty  of  transporting  and  transferring  them. 


THE  FIRST  FORMS   OF  MONET.  95 

Fur  Money, — One  of  the  earliest  forms  of  money  consisted 
of  the  skins  of  fur  bearing  animals.  Fur  would  be  the  com- 
modity of  which  the  hunter  would  have  a  surplus,  and  the 
hunter  is  likely  to  be  the  first  member  of  industrial  society 
having  need  of  a  currency.  Fur  money  has  been  in  common 
use  in  some  parts  of  Eussia  and  Siberia  for  many  centuries,  and 
in  the  latter  country,  as  well  as  in  the  far  north  of  North 
America,  it  is  still  a  medium  of  exchange.  At  the  posts  of  the 
Hudson  Bay  Company,  the  beaver  skin  is  the  unit  of  value. 
For  small  change  martin  skins  are  used,  three  of  them  being 
equal  to  one  beaver  skin.  If  an  Indian  trapper  desires  a  rifle 
he  must  turn  over  fifteen  beaver  skins,  more  or  less,  according 
to  the  state  of  prices.  If  he  wants  a  pair  of  boots,  the  price 
will  be  measured  in  martin  skins.  The  Russian  word  "kung** 
means  both  money  and  fur. 

Cattle  Money. — With  the  advent  of  pastoral  life  and  among 
a  pastoral  people  cattle  became  a  convenient  commodity  for 
use  in  exchange.  They  are  then  more  universally  distributed 
and  more  universally  desired  than  any  other  commodity,  and 
they  naturally  became  current  commodities.  The  domestic 
animals  continued  for  centuries  to  be  the  unit  of  value. 
Homeric  prices  are  ordinarily  quoted  in  oxen.  The  Latin 
word  "pecunia,"  meaning  cattle,  by  the  law  of  the  association, 
came  to  mean  money,  just  as  the  Eussian  word  for  skin  came 
to  mean  money.  The  commodity  derives  a  new  meaning  from 
the  use  which  is  made  of  it. 

Grain  Money. — When  men  enter  upon  the  agricultural  life, 
the  cereals  begin  to  be  more  universally  distributed  and  desired 
than  cattle.  Cattle  raising  then  becomes  a  secondary  occupa- 
tion and  grain  raising  a  primary  occupation.  Grain  either 
supersedes  the  use  of  cattle  as  money  or  is  used  contemporane- 
ously. There  are  many  qualities  about  grain  which  fit  it  to  be 
the  currency  of  a  higher  civilization.  Every  member  of  the 
community  without  exception  wants  it  and  can  use  it.  It  is 
of  greater  durability  than  any  form  of  money  which  precedes 
it.  In  modern  times  it  is  usually  classed  among  perishable 
commodities,  yet,  as  things  went  in  the  village  community 
life,  it  was  capable  of  longer  preservation  than  any  food  com- 


96  DESCRIPTIVE  ECONOMICS. 

modity  in  common  use.  Moreover  its  divisibility  is  an 
important  quality.  For  the  first  time  men  were  now  provided 
with  a  full  supply  of  small  change.  Grain  could  be  divided 
into  pecks,  half -pecks  or  quarts.  Among  the  village  Indians 
of  New  Mexico  it  is  still  a  common  medium  of  exchange.  In 
medieval  England,  its  use  for  the  purpose  of  payment  or 
exchange  was  preserved  even  after  coinage  came  into  vogue. 
The  royal  tithes  were  sometimes  paid  in  wheat.  Enough  to 
make  flour  for  one  hundred  men  counted  as  a  shilling. 

Colonial  Indian  Money. — The  Indian  money  of  colonial 
New  England  furnishes  a  good  illustration  of  a  primitive  medi- 
um of  exchange.  It  was  the  wampum  of  the  Narragansetts 
and  Montauks.  It  has  been  rated  a  very  important  factor  in 
New  England  civilization  because  of  its  use  in  facilitating  the 
exchange  of  the  furs  of  the  interior  Indians  for  the  commodi- 
ties of  the  whites.  It  brought  the  furs  from  the  North  and 
West  to  the  New  England  colonies,  and  they  in  turn  exchanged 
the  furs  for  molasses  and  sugar,  and  the  stock  in  trade  of  the 
Dutch  and  English  trader.  It  represented  the  rude  beginning 
of  coinage.  Deftness,  skill,  and  application  were  required  to 
make  it  from  the  inner  whorl  of  the  peri-winkle  shell.  It 
required  labor  to  grind  and  polish  the  beacjs  upon  stones  and 
pierce  them  with  the  little  holes  whereby  they  could  be  braided 
and  strung.  Wampun  gave  value  to  the  labor  of  the  Narra- 
gansetts, and  it  bought  them  tools  and  provisions  of  the 
settlers. 

Other  Illustrations. — According  to  Homer,  "the  long-haired 
Greeks  bought  wine,  some  for  brass,  some  for  shining  iron, 
others  for  hides,  some  for  the  oxen  themselves,  and  some  for 
slaves."  This  illustrates  the  use  of  the  metals,  in  primitive 
forms  along  with  other  commodities,  as  money.  Salt  bars  are 
the  currency  of  Dahomey.  Glass  beads  and  cotton  cloth  are 
current  money  in  Central  Africa. 


A  REVIEW  OF  THE  ECONOMIC  PROGRESS.  97 

CHAPTER    VI. 
A  REVIEW  OF  THE   ECONOMIC  PROGRESS. 

Mastery  Over  Nature. — You  have  observed  that  subjection 
to  nature  characterized  the  economics  of  the  family.  At  first 
men  were  wholly  dependent  upon  the  bounty  of  nature,  living 
on  fruits,  nuts,  and  bulbs.  Afterward  they  acquired  skill  and 
unity  sufficient  to  kill  wild  animals.  That  meant  a  considerable 
progress ;  next  they  domesticated  the  wild  animals.  That 
indicated  a  still  greater  victory  over  nature's  forces.  Now  they 
have  come  to  regulate  the  course  of  nature  by  the  cultivation 
of  plants  for  food. 

The  Progress  Illustrated. — The  Todas,  one  of  the  Hill 
Tribes  of  India,  still  live  in  a  strictly  pastoral  state.  Their 
country  is  rich  in  virgin  soil,  full  of  fertile  valleys  and  plains, 
but  their  subsistence  is  almost  solely  upon  buffalo  meat,  and 
milk.  A  recent  traveler  among  them  describes  their  condition 
as  most  filthy  and  wretched  in  the  extreme.  Some  of  the 
neighboring  tribes,  which  have  passed  out  of  the  pastoral  state, 
and  are  cultivating  soil  of  the  same  character  as  that  of  the 
Toda  territory,  are  prosperous  and  wealthy.  The  economic 
progress  of  the  latter  is  the  story  of  man's  transition  from  the 
"  savage's  subjection  to  nature,  to  the  citizen's  mastery  of  her 
forces." 

The  Increasing  Sources  of  Subsistence.  —  Just  as  the 
seed  of  the  cereals  multiplies  a  hundred  fold  when  it  is  given 
a  chance,  so,  without  exaggeration,  we  may  say  that  men  have 
increased  their  material  welfare  a  hundred  fold  when  they  have 
learned  to  give  it  that  chance.  Ethnologists  find  it  worthy  of 
remark  that  people  living  in  the  hunter  or  pastoral  state  have 
no  stated  meals  or  meal  times.  When  they  become  partially 
agricultural,  they  have  one  prepared  meal  a  day,  as  was  the 
case  with  the  Iroquois.  When  they  indefinitely  increase  their 
sources  of  food  supply  by  the  systematic  cultivation  of  the 
7 


98  DESCRIPTIVE  ECONOMICS. 

cereals,  they  have  at  least  a  breakfast  and  a  dinner,  like  the 
village  Indians  of  the  Mexicos,  and  they  are  in  want  only  at 
rare  periods.  The  economic  condition  of  the  isolated  family 
was  ordinarily  that  which  we  call  poverty-stricken.  In  the 
village  there  was  thrift,  forehandedness  and  comfort,  not  com- 
fort according  to  modern  standards  but  according  to  the 
standard  of  the  preceding  economic  stage. 

The  Use  of  Tools. — The  plow  drawn  by  an  ox  is  a  great 
labor-saving  machine  as  compared  with  the  forked  stick. 
Men  could  not  build  the  houses  of  solid  foundations  and  sub- 
stantial structure,  which  they  erect  in  the  village  stage  of 
economics,  without  the  use  of  various  tools  and  appliances. 
Following  the  return  of  the  survivors  of  the  Jeannette,  Congress 
appropriated  a  considerable  sum  of  money  for  the  purchase  of 
presents  for  the  natives  of  the  Lena  Delta,  who  had  rendered 
aid  and  succor  to  the  members  of  the  expedition.  The  ex- 
penditure of  the  money,  involving  the  selection  and  purchase 
of  the  articles  to  be  distributed,  was  entrusted  to  an  arctic 
traveler  who  knew  the  native  wants.  He  bought  quantities  of 
sail  needles,  knives  with  wrought  iron  blades  which  would 
not  snap,  hatcliets,  ice  picks  with  long  blades  for  the  thick  ice, 
carpenters'  tools,  thimbles,  thread,  buttons,  drinking  cups  and 
plates  of  granite  ware,  and  copper  kettles,  and  white  horse  hair 
for  fish  lines  and  nets.  The  entire  assortment  was  consigned 
to  the  far  north  and  distributed  among  the  natives  of  the 
coast.  They  discarded  their  blunt  bone  needles  and  knives, 
their  stone  kettles  and  thong  fish  nets  and  entered  upon  a  new 
career.  It  is  announced  that  they  have  developed  an  economic 
condition  infinitely  superior  to  the  old.  They  have  a  more 
regular  and  stated  supply  of  food.  They  live  in  better  and 
warmer  houses,  and  are  more  comfortably  dressed.  In  a  few 
years  they  are  likely  to  advance  almost  an  entire  ethnic  period. 

The  Exchange  of  Commodities  involves  another  important 
economic  step  in  advance.  Instead  of  trying  to  produce  every- 
thing themselves — each  man  for  himself — the  members  of  the 
village  have  learned  to  satisfy  some  of  their  wants  by  the  ex- 
change of  commodities.  It  involves  a  slight  division  of  em- 
ployments— a  condition  of  things  in  which  some  of  the  villagers 


A    REVIEW  OF  THE   ECONOMIC  PROGRESS.  99 

devote  themselves  to  one  kind  of  labor.  It  involves  some 
economic  dependence.  The  farmer  depends,  for  a  part  of  his 
wants  upon  the  labors  of  the  carpenter,  of  the  smith  and  the 
miller.  The  smith  depends  upon  the  farmer,  the  herdsman 
and  the  other  workers  of  the  village.  Each  must  do  the  part 
he  has  assumed  or  mischief  results.  Industrial  society — the 
state  of  living  in  which  each  person  depends,  sometimes  very 
remotely,  upon  the  labor  of  every  other  person — is  taking 
shape. 

The  Distribution  of  Commodities. — This  is  hardly  appre- 
ciable yet.  If  one  village  happens  to  have  a  dearth  of  a  com- 
modity which  is  in  demand,  and  a  neighboring  village  has  a 
surplus,  the  surplus  is  likely  to  be  taken  in  a  raw  state  to  where 
it  is  wanted,  providing  the  distance  is  not  great.  Perhaps 
there  are  a  few  men  who  make  it  their  occupation  to  transfer 
a  surplus  from  the  place  where  it  is  produced  to  the  place  where 
it  is  wanted.  They  add  to  the  general  economic  dependence 
prevailing  in  the  village.  They  must  be  supported  while 
attending  to  their  business. 

The  Growth  of  Property. — Not  the  least  of  the  features 
indicating  economic  progress  is  the  growth  of  property.  The 
right  of  private  ownership  is  first  extended  to  tools^  weapons 
and  domestic  utensils.  Finally  all  articles  of  a  personal  nature 
cease  to  be  owned  in  common  and  proprietary  interest  centres 
in  one  person.  At  the  end  of  the  village  stage  there  is  private 
property  in  land.  It  commences  with  the  ownership  of  im- 
provements and  assisted  by  the  associations  arising  from  the 
long  possession  of  a  certain  parcel  it  comes  to  pass,  that  the 
holder  and  user  is  considered  to  have  a  permanent  right  of 
possession  which  ripens  into  a  proprietary  interest  in  the  soil 
itself.  Of  course,  the  possession  of  property  is  still  frequently 
disputed.  There  is  more  respect  for  private  property  than 
when  its  possession  depended  upon  the  exercise  of  brute 
strength,  but  lawlessness  and  disorder  is  a  prevailing  feature. 

Village  Isolation. — Notwithstanding  this  economic  pro- 
gress, the  village  community  is  characterized  by  economic 
isolation.  It  is  an  isolated  economic  unit  sufficient  unto  itself, 
just  as  before  it,  each  family  was  sufficient  unto  itself.   It  sup- 


100  DESCRIPTIVE  ECONOMICS. 

plies  its  wants  by  the  labor  of  its  members  and  within  its 
borders.  The  Pueblos  have  no  commercial  intercourse.  An 
Anglo-Saxon  village  was  independent,  so  far  as  its  economic 
life  was  concerned,  of  every  other  village. 


PAUT   III. 

EOOISrOMIOS   OF  THE  CITY. 


CHAPTER  I. 
THE     TRADER. 


The  Rise  of  Cities  is  the  next  epoch  marking  event  in 
economic  progress.  The  out-line  study  of  the  village  and  its 
system  of  economy  has  been  concluded,  although  frequent  ref- 
erences must  be  made  to  previous  parts  of  the  work  for  the 
purpose  of  comparison  and  illustration.  There  is  one  char- 
acteristic of  village  economics  which  should  be  clearly  borne 
in  mind,  when  the  outline  study  of  the  succeeding  economic 
stage  and  of  a  higher  form  of  economy  is  commenced.  It 
is  the  economic  isolation  of  the  village.  The  first  economic 
unit  was  the  family.  The  family  merges  into  the  higher 
economic  organization  of  the  village,  and  the  village  becomes 
the  unit.  The  village  is  self-sufficient.  The  villagers  have  no 
economic  dependence  without.  The  community  satisfies  all  its 
wants  by  the  labor  of  its  members.  The  productions  of  the 
village  are  rarely  exchanged  or  distributed  beyond  the  village 
population.  •  Now,  however,  the  village  economy  differentiates. 
The  villagers  begin  to  rely  upon  adjoining  or  foreign  villages 
for  part  of  their  wants.  In  the  course  of  growth  their  wants 
have  increased  beyond  the  capacity  of  the  village  to  provide. 
This  increase  of  wants  first  relates  to  some  articles  of  necessity 
which  the  natural  productions  of  the  community  cannot  pro- 
vide. Next,  it  relates  to  articles  of  luxury  which  are  not 
found  in  the  community  and  cannot  be  produced  there,  but 
which  must  usually  come  from  foreign  lands.     In  the  third 

101 


102  DESCRIPTIVE  ECONOMICS. 

place  it  relates  to  a  deartli  of  home  productions,  necessi- 
tating the  use  of  the  surplus  of  adjoining  communities. 
In  the  beginning,  all  of  the  articles  intended  to  supply  these 
increased  wants  of  the  village  are  brought  into  it  in  a  raw  state. 
The  surplus  productions  of  the  village  which  go  to  pay  for  the 
articles  brought  into  it,  are  taken  away  in  a  raw  state.  Later 
on,  when  the  economy  of  the  city  has  assumed  form,  stated 
manufacturing  commences,  and  manufactured  articles  are 
handled. 

Town  and  City. — In  olden  times  a  town  was  any  enclosed 
collection  of  dwellings.  The  common  use  of  the  quick-set 
hedge  or  tun,  as  the  enclosing  medium,  gave  a  name  to  the 
enclosure  and  it  came  to  be  called  a  town.  As  wars  and 
domestic  troubles  increased,  the  timber  palisade  supplemented 
the  hedge  and  the  town  finally  became  a  fortified  place.  In 
England,  the  terms  town  and  city  are  now  nearly  synonymous. 
Town  is  the  more  common  and  the  more  general  term,  because 
"  city  "  was  formerly  applied  only  to  those  towns  which  had 
been  the  sees  of  bishops.  In  the  United  States  the  city  is  an. 
incorporated  municipality.  In  many  states  a  town  must  have 
a  population  of  over  10,000  in  order  to  become  incorporated  as 
a  city.  Distinctions  of  size,  rank  and  corporate  privileges 
have  therefore  come  to  be  associated  with  the  terms  town  and 
city.  The  town  may  be  incorporated,  but  its  population  is 
small  and  as  a  body  corporate  it  possesses  less  priveleges  than 
the  city.  In  economics,  the  two  terms  may  frequently  be  used 
synonymously.  It  is  better,  however,  to  preserve  the  idea  of 
rank  and  to  use  the  word  town  as  a  collection  of  houses  and 
people,  larger  than  the  village,  having  a  market — as  the  market 
town  for  a  number  of  neighboring  villages.  The  city  is  then 
an  enlarged  town,  superior  in  size  and  in  the  volume  of  its 
trade  and  industry.  It  is  the  entrepot  of  a  large  territory, 
embracing  not  only  many  villages,  but  many  market  towns. 

Economic  Activity  Concentrating. — The  trade  which 
results  in  the  attempt  to  satisfy  the  increasing  wants  of  the  in- 
creasing population  of  the  villages,  produces  concentration  of 
economic  activity  among  them.  Just  as  the  economic  activity 
of  the  family  becomes  crystalized  in  and  concentrated  in  the  vil- 


THE   TRADER.  103 

lage  community,  so  that  of  the  villages,  concentrates  and  crys- 
talizes  about  some  central  village.  The  village  becomes  the 
market  town  of  a  large  number  of  villages.  Later  on  it  is  the 
trading  town  of  the  country.  In  a  succeeding  paragraph  we 
shall  mention  some  of  the  conditions  determining  the  villages 
which  are  to  become  towns  and  those  which  are  to  remain  vil- 
lages.    It  is  a  process  of  natural  selection. 

The  Trader  Builds  the  Town. — While  this  chapter  is 
entitled  "  The  Trader,"  much  of  the  discussion  is  devoted  to 
the  rise  of  cities,  and  that  title  might  not  improperly  be  given 
to  the  chapter.  The  title  employed  is  preferable,  however, 
because  the  origin  of  cities,  from  an  economic  standpoint,  is 
almost  wholly  ascribed  to  trade  and  commerce  and  their 
influences.  It  is  the  trader  and  the  prosecution  of  his  occupa- 
tion which  makes  the  city  ;  and  therefore  the  trader  is  the 
ultimate  economic  factor  to  be  studied.  For  convenience  of 
stud}'^,  however,  the  rise  of  cities  as  one  of  the  facts  of  economic 
history,  will  be  first  discussed.  The  relation  of  trade  and  the 
trader  to  the  origin  of  cities  may  then  be  examined.  Trade  is 
the  cause,  the  city  is  the  effect. 

Maritime  Cities. — In  studying  the  rise  of  cities  some  slight 
distinction  will  need  to  be  made  between  maritime  and  inland 
cities.  The  maritime  city  is  the  first  in  order  of  formation. 
Kepetition  may  here  be  made  of  the  statement  in  a  previous 
paragraph,  entitled,  *' The  Fisher  First."  It  was  stated  that 
the  seas  and  rivers  are  the  first  avenues  for  the  progress  of 
civilization  and  industry.  Along  the  seacoasts,  therefore,  will 
naturally  be  found  the  earliest  signs  of  economic  development 
out  of  the  village  state.  The  first  requisite  for  the  formation 
of  a  maritime  city,  is  a  safe  and  convenient  harbor,  with 
facilities  for  the  encouragement  of  navigation.  These  are  the 
conditions  determining  the  location.  The  Mediterranean  sep_ 
arated  continents  of  diffuse  and  varied  productions.  It  was 
an  inland  sea,  with  shores  indented  by  good  harbors.  Those 
shores  have  been  the  scene  of  the  highest  and  best  development 
of  city  economics.  The  Mediterranean  was  the  great  highway 
between  the  east  and  the  west,  and  the  location  of  the  Mediter- 
ranean cities  guaranteed  the  highest  commercial  advantages. 


104  DESCRIPTIVE  ECONOMICS. 

They  became  the  warehouses  for  the  rare  and  costly  products 
of  the  more  advanced  civilization  of  the  east.  Through  their 
instrumentality  those  eastern  products  were  exchanged  for  the 
ruder  products  of  the  west.  In  discussing  city  economics,  the 
mind  naturally  turns  to  a  contemplation  of  the  greatness  of 
such  cities  as  Venice  and  Genoa,  and  before  them,  of  Athens 
and  Rome.  The  greatness  of  the  medieval  maritime  cities  was 
more  purely  commercial  than  that  of  the  highest  type  of  inland 
cities  of  the  same  period.  Eecent  investigation  has  traced 
back  the  history  of  London  to  a  time  when  it  was  little  more 
than  an  agricultural  village  community.  It  became  a  great 
city,  while  the  neighboring  villages  remain  villages  still,  simply 
because  of  its  location  with  reference  to  commerce.  London 
may  be  called  the  beginning  of  city  economics  in  England,  at 
least  as  compared  with  all  other  maritime  cities. 

Inland  Cities. — The  formation  of  inland  cities  rests  upon  a 
slightly  different  basis.  The  maritime  city  originated  in  the 
concentration  of  maritime  trade,  which  was  frequently  interna- 
tional trade,  or  more  properly,  trade  across  the  seas.  It  was  a 
trade  between  different  peoples  of  the  diverse  products  of 
different  countries.  The  inland  town  arises  from  the  concen- 
tration of  the  economic  activity  of  inland  villages.  The  first 
manifestation  is  "the  exchange  of  the  surplus  products  of 
neighboring  villages.  Afterward  comes  the  exchange  of  those 
products  for  foreign  products  in  connection  with  the  nearest 
maritime  city.  The  natural  and  geographical  conditions  which 
determine  the  location  of  the  inland  city  are  as  fully  pro- 
nounced as  those  which  determine  the  location  of  the  maritime 
city. 

Good  Roads. — The  modern  advocates  of  good  roads  would 
find  much  assistance  for  their  cause  in  the  discussion  of  the 
relation  which  the  development  of  early  communities  bears  to 
the  passibility  of  highways.  The  location  of  the  site  of  an 
inland  town  involves  the  question  of  accessibility  as  fully  as 
the  location  of  the  site  of  the  maritime  town.  Throughout  all 
medieval  Europe  the  location  of  the  towns  which  then  sprang  up 
was  determined  by  the  condition  of  the  thoroughfares.  There 
were  few  good  roads  and  the  means  of  transportation  were  rude 


THE  TRADER.  105 

and  inefficient.  It  was  physicially  impossible  for  a  town  to  rise 
in  a  location  not  accessible  by  the  best  of  the  thoroughfares  of 
the  time.  Where  the  main  arteries  of  travel  crossed,  therefore, 
other  things  being  equal,  there  was  a  converging  of  good  roads 
and  the  making  of  a  market  town. 

The  Presence  of  Law  and  Order,  and  the  prevalence  of 
lawful  authority  would  have  much  to  do  with  locating  a  town. 
At  the  beginning  of  city  economics,  it  is  well  to  bear  in  mind, 
there  is  no  centralized  authority.  There  is  no  national  govern- 
ment which  looks  after  the  preservation  of  order  over  a  large 
territory.  Disorder  and  violence  is  as  prevalent  as  peace  and 
security.  The  various  towns  are  looking  after  their  individual 
interests,  trying  to  increase  their  respective  welfare,  and  there 
is  no  widespread  ruling  authority.  Trade  goes  where  it  is  pro- 
tected, and  as  a  flourishing  trade  is  mainly  responsible  for 
the  formation  of  the  town,  that  town  which  preserves  the 
best  order,  in  which  the  trader's  wares  are  most  secure  in  his 
possession,  and  he  is  most  free  from  robbery  and  violence,  will 
be  most  likely  to  grow.  In  medieval  Europe  the  ruling 
authorities  of  the  monasteries  were  the  first  to  exercise  civil 
authority  and  introduce  tranquility.  The  monastery  itself 
furnished  a  refuge  from  organized  bands  of  robbers,  and  be- 
neath its  walls  frequently  grew  up  the  early  flourishing  trading 
towns.  The  monks  not  only  instilled  peace  and  tranquility, 
curbing  the  rude  elements  of  the  time,  but  they  taught  the 
arts  of  industry  and  thus  the  monastery  frequently  became  the 
nucleus  of  a  town. 

City  Economics  in  North  America. — Up  to  this  point  it 
has  been  easy  to  find  excellent  illustrations  of  the  development 
of  the  various  economic  stages  in  the  Western  Hemisphere. 
We  shall  look  in  vain,  however,  for  the  existence  of  a  municipal 
economy.  There  are  many  great  cities,  of  course,  but  they  are 
parts  of  a  larger  whole.  They  are  nationalized  and  belong  to 
the  present  stage  of  economics.  Following  the  publication  of 
the  discoveries  of  the  Spanish  conquerors  in  Mexico,  and  down 
to  a  comparatively  recent  date,  the  Pueblo  of  Mexico  was 
spoken  of  as  a  city.  It  was  described  as  existing  in  an  advanced 
economic  state  with  pronounced  municipal  institutions.     If 


106  DESCRTPTIVE  ECONOMICS. 

the  Western  Hemisphere  developed  municipal  economics, 
Mexico  was  certainly  the  only  illustration.  Better  and  more 
recent  investigation,  however,  discloses  the  fact  that  the  far- 
famed  magnificence  of  the  city  was  an  exaggeration.  The 
palace  of  the  Montezumas  was  simply  an  extended  pattern  of 
the  enlarged  communal  house  peculiar  to  the  village  Indians. 
While  its  proportions  were  larger  and  its  construction  of  a 
better  character  than  the  other  dwellings,  it  appears  to  have 
been  an  ordinary  affair  as  compared  with  the  vivid  descriptions 
of  the  Spanish  explorers.  The  location  of  the  Pueblo  in  the 
valley  of  Mexico  gave  it  important  economic  advantages,  and 
its  population,  while  not  as  large  as  that  stated  by  the  Spaniards, 
was  much  larger  than  that  of  any  Pueblo  before  or  since.  It 
possessed,  howevei",  all  the  economic  characteristics  of  the 
village.  It  was  economically  isolated,  and  it  doubtless  belonged 
to  the  village  stage  of  economics.  It  would  be  interesting  to 
speculate  upon  the  economic  growth  to  which  it  might  have 
been  subject,  and  the  economic  stage  which  it  might  have 
reached,  had  it  been  left  unmolested. 

The  Sites  of  Cities  are  Natural. — Generally  speaking, 
therefore,  it  may  be  said  that  the  sites  upon  which  cities  arise 
are  natural.  The  locations  depend  upon  the  topographical  and 
geographical  features  of  the  surrounding  territory.  It  has 
always  been  found  difficult,  if  not  futile,  to  attempt  a  city  where 
nature  did  not  intend  that  a  city  should  be.  An  artificially 
selected  site  cannot  be  made  the  entrepot  of  trade  and  industry. 
There  must  be  present  the  natural  geographical  advantages  of 
location.  Men  have  often  thought  that  they  could  lay  out 
city  sites  without  reference  to  the  natural  conditions  which 
must  be  present.  After  they  have  laid  out  their  streets  and 
mapped  the  site  of  the  coming  metropolis,  reserving  the  lots 
for  the  city  hall,  the  railway  stations  and  principal  public 
buildings,  it  always  remains  a  site — on  paper.  The  influence 
and  wealth  of  kings,  queens  and  nobles  have  failed  to  build 
up  a  city  upon  an  artificially  selected  site.  Emperor  Joseph  II. 
and  the  Empress  were  called  upon  to  lay  the  foundation  stones 
of  the  projected  city  of  Yekaterinoslav  in  the  Taurida.  The 
map  of  the  city  was  projected  upon  magnificent  proportions. 


THE  TRADER.  107 

When  the  Emperor  had  finished  his  part  of  the  ceremony,  he 
surveyed  the  barren  plain  and  said  :  "  I  have  finished  a  vast 
enterprise  in  one  day  with  the  Empress  of  Eussia  ;  she  has 
laid  the  first  stone  of  a  town  and  I  the  last."  All  this  has  been 
frequently  illustrated  by  the  attempts  to  build  cities  in  the  West. 
They  cannot  be  built  on  paper.  Their  location  must  be  such 
as  will  encourage  commerce  to  bring  raw  products  for  manu- 
factures and  take  away  and  distribute  the  manufactured  com- 
modities. In  a  word,  the  trader,  the  artisan  and  the  agricul- 
turist must  all  be  encouraged  to  make  the  place  a  center  of 
economic  activity,  otherwise  it  will  have  no  excuse  for  being  a 
city.  Without  a  location  of  the  character  specified  one  village 
will  always  remain  a  village,  and  with  it  a  neighboring  village 
will  become  a  town  and  then  a  city. 

The  Early  Maritime  Trader  has  three  characteristics 

(1.)  He  is  a  traveler,  an  explorer,  an  adventurer,  a  person  of 
note  like  Marco  Polo.  At  the  beginning  of  the  occupation  he 
goes  coastwise  and  visits  the  towns  of  the  neighboring  coast. 
He  takes  away  the  surplus  products  of  his  own  town  and 
exchanges  them  for  the  surplus  of  the  ports  at  which  he 
touches.  He  does  not  have  to  go  far  to  see  strange  sights  and 
procure  strange  commodities.  Each  voyage  is  extended  a  little 
farther  than  the  preceding  one.  He  finally  sails  boldly  out 
over  unknown  seas  to  unknown  shores.  If  he  ever  returns  it 
is  with  the  hold  of  his  vessel  filled  with  the  rare  objects  of 
unknown  lands  which  become  the  luxuries  of  his  own. 

(2.)  He  goes  in  force.  His  ship  is  armed.  He  trades  hy 
wile  and  strategy.  When  he  cannot  make  a  fair  exchange, 
according  to  his  own  notions,  he  seizes  by  force.  Trade  by 
fraud  and  violence,  which  characterizes  barter  between  adjoin- 
ing tribes  of  savages  in  the  family  stage  of  economics,  still 
exists. 

(3.)  He  deals  in  luxuries.  At  first  the  products  of  his  own 
country  are  luxuries  to  the  foreigners  with  whom  he  trades, 
and  the  strange  commodities  which  he  brings  back  are  luxuries 
to  his  countrymen.  Salt  has  frequently  been  one  of  the  first 
commodities  to  be  the  subject  of  foreign  commerce.  It  is 
then  a  great  luxury.     At  a  later  period  of  the  maritime 


108  DESCRIPTIVE  ECONOMICS. 

trader's  career  he  handles  luxuries  of  a  different  kind.  They 
are  commodities  which  minister  to  vanity  and  pleasure.  The 
Italian  city  republics,  at  the  height  of  their  prosperity,  were 
the  intrepot  of  luxuries,  the  rare  and  costly  products  of  India. 

The  Inland  Trader,  like  the  maritime  trader,  at  first,  goes 
in  force.  He  must  be  armed  to  protect  himself  from  that 
large  portion  of  the  community  which  exists  by  violence.  He 
must  have  a  retinue  of  followers  to  protect  his  goods.  He 
makes  his  way  "through  a  wilderness  of  taxes."  If  he  goes  no 
farther  than  the  market  town  nearest  to  his  own,  he  finds  that 
he  must  pay  a  tax  in  order  to  trade  there.  He  finds  the  towns- 
people banded  together  to  control  trade  among  themselves,  and 
he  must  do  business  in  subjection  to  their  rules  and  regula- 
tions. He  frequently  goes,  therefore,  in  company  with  a  num- 
ber of  his  own  townspeople,  so  that  unlawful  exactions  may 
not  be  made  in  order  to  secure  trading  privileges.  The  towns 
where  the  most  security  against  robbery  is  furnished,  and 
where  trade  regulations  are  most  liberal,  are  the  first  to  feel 
the  effects  of  increasing  domestic  commerce.  Other  things 
being  equal,  they  are  the  first  to  assume  the  proportions  of  a 
city.  The  first  inland  traders  deal  largely  in  raw  products. 
They  transport  the  surplus  of  one  village  to  an  adjoining  vil- 
lage where  it  is  needed.  They  are  more  like  hawkers  and 
peddlers  going  from  place  to  place  with  their  goods.  When 
their  stock  in  trade  assumes  some  magnitude  they  are  like  the 
African  caravaneer. 

Markets  and  Market  Days. — As  the  village  grows  in  popu- 
lation it  comes  to  have  a  market  place  with  stated  market  days. 
The  agricultural  products  of  the  surrounding  country  are 
brought  in  on  the  market  days.  The  farmers  exchange  their 
surplus  commodities  among  themselves  and  with  the  villagers 
for  simple  manufactures.  When  money  comes  into  vogue 
there  is  a  sale  and  purchase  and  truck  economy  disappears. 
The  products  which  are  handled  in  the  early  village  markets 
are  wholly  domestic  and  are  limited  in  variety.  Foreign  goods 
are  first  found  at  the  great  periodical  fairs.  Trade  promises 
to  be  extensive  enough  at  the  fairs  to  attract  traders  from  the 
distant  market  towns  and  from  the  maritime  cities. 


THE  TRADER.  109 

Stourbridge  Fair. — It  is  worth  while  to  take  a  glance  at 
one  of  those  ancient  fairs,  on  account  of  the  important 
economic  features  connected  with  them.  The  ancient  fair  at 
Stourbridge,  near  Cambridge,  will  serve  as  a  type.  Here 
might  be  seen  monks  from  the  priories  of  Maxtoxe  and  Bices- 
ter, although  it  was  more  than  one  hundred  good  miles  away 
to  either  of  those  monasteries.  With  the  monks  came  bailiffs 
from  the  estates  of  the  great  lords  and  earls  within  a  range  of 
fifty  or  seventy-five  miles.  They  were  intent  on  laying  in  the 
year's  supply  of  provisions.  They  passed  around  among  the 
various  streets  or  alleys  of  the  ground,  each  devoted  to  its  par- 
ticular product,  and  made  their  purchases.  Perhaps  the  bail- 
iffs brought  with  them  surplus  products  from  their  estates  for 
the  purpose  of  exchange.  Each  article  had  its  own  portion  of 
the  grounds  allotted  to  it.  In  one  street  were  booths  contain- 
ing the  pigs;  in  another  those  containing  the  sheep,  and  then 
would  come  the  beeves.  Another  portion  of  the  grounds  was 
set  off  for  the  booths  containing  salt  meats.  Then  there  were 
booths  for  wine,  wax,  wheat,  malt  and  salt.  The  men  from 
each  town  were  placed  together  as  far  as  possible.  They 
endeavored  to  occupy  adjoining  booths  and  they  worked 
together  for  their  common  interest  and  protection.  There 
were  quarters  where  the  servants  stationed  themselves  for  hire, 
each  with  a  badge  denoting  his  occupation.  The  carters  with 
their  whips;  the  cow  herds  with  a  lock  of  cow's  hair  in  the  hat; 
the  farm  servants  with  great  boquets  of  grass  and  field  flowers; 
the  shepherds  with  their  crooks;  bricklayers  with  their  trowels, 
and  the  various  simple  craftsmen  with  the  implements  of  their 
craft.  There  were  courts  of  pie-powder,  said  to  be  named  from 
the  expedition  with  which  offenses  were  punished — before  the 
dust  was  off  the  feet.  Perhaps  the  term  originated  from  the 
fact  that  the  trader  of  the  time  was  a  dusty  foot — he  traveled 
with  his  wares  to  the  fair. 

The  Ancient  Origin  of  Fairs. — The  great  fairs  which  were 
common  to  all  the  nations  of  Europe  within  historic  times,  are 
usually  ascribed  to  grants  or  charters  from  the  kings  or  ruling 
authorities.  It  is  a  fair  presumption,  however,  that  they  had 
their  origin  long  before  the  existence  of  kingdoms  or  central- 


110  DESCRIPTIVE  ECONOMICS. 

ized  authorities.  Thej  would  naturally  arise  as  soon  as  any 
considerable  number  of  neighboring  village  communities  came 
to  produce  a  surplus  of  commodities.  The  villagers  find  it 
convenient  to  meet  at  a  central  point  and  at  stated  intervals, 
for  the  purpose  of  making  exchanges.  At  the  time  of  the  con- 
quest of  Mexico,  the  Spaniards  found  a  fair  in  operation,  sim- 
ilar in  many  respects  to  the  European  fairs.  The  Fijians, 
when  first  visited  by  the  early  navigators,  were  in  the  habit  of 
meeting,  at  stated  intervals  and  at  fixed  points,  for  the  purposes 
of  barter.  It  was  inter-island  barter,  Just  as  the  early  European 
fairs  were  for  the  purposes  of  inter-village  barter.  Each  Fijian 
island  represented  at  the  fair,  corresponded  to  a  village  commu- 
nity. The  economic  importance  of  these  fairs  or  markets  lies 
in  the  fact  that  they  are  the  beginning  of  the  centralization  of 
trade  and  industry.  They  represent  the  decay  of  the  domestic 
system,  when  the  family  not  only  carried  on  agricultural 
operations,  but  also  manufactured  by  hand  whatever  products 
it  required,  and  the  beginning  of  the  commercial  system,  when 
the  family  confined  itself  to  one  or  two  occupations,  and 
exchanged  its  few  products  for  the  handiwork  of  others. 

Significance  of  the  Trader's  Employment. — When  in- 
dustrial activity  is  confined  to  village  communities,  there  are 
comparatively  few  joersons  engaged  in  trading.  The  rise  of 
towns  means  a  great  growth  in  the  number  of  those  who  devote 
themselves  to  a  mercantile  life.  But  the  towns  exist  because 
there  are  a  large  number  of  traders,  controlling  a  large  volume 
of  trade.  Wherever  the  traders  find  it  convenient  to  congre- 
gate and  exchange  their  wares,  the  resulting  activity  produces 
the  market  town  for  a  large  extent  of  territory.  If  the  condi- 
tions are  such  that  more  and  more  traders  are  attracted  to  the 
town,  it  speedily  becomes  a  commercial  and  industrial  center. 
Artisans  find  opportunity  to  exchange  or  sell  their  wares.  The 
trader  or  middle-man  must  rely  largely  upon  the  labor  of 
others  for  the  production  of  his  wants.  Therefore,  both 
the  artisan  and  the  agriculturist  of  the  surrounding  country 
find  opportunity  for  making  exchanges.  The  division  of 
employments  is  enlarged,  not  only  by  the  addition  of  the 
trader,  but  by  the  addition  of  the  craftsman  whom  we  shall 


THE   TRADER.  Ill 

discuss  in  the  succeeding  chapter.  The  last  yestige  of  individ- 
ual, economic  isolation,  practically  disappears.  The  merchant 
procures  his  agricultural  products  by  exchange.  The  farmer 
procures  his  utensils  by  exchange.  Those  persons  devoting 
themselves  to  a  particular  kind  of  labor,  now  become  depend- 
ent for  the  satisfaction  of  the  majority  of  their  wants  upon  the 
economic  activity  of  people  devoting  themselves  to  other  kinds 
of  labor. 

The  Modern  and  the  Medieval  City. — It  was  said  in 
an  earlier  part  of  the  chapter  that  no  part  of  the  western 
hemisphere  has  passed  through  the  city  stage  of  economics. 
Its  aboriginal  inhabitants  were  found  either  in  the  family  or 
in  the  village  stage,  and  none  of  them  progressed  to  a  higher 
stage.  So  far  as  they  exist  to-day,  they  either  remain  in 
the  same  economic  state,  or  else  they  have  experienced  the 
retrogression  which  follows  the  imposition  of  a  higher  civiliza- 
tion upon  a  lower.  The  whole  country,  following  the  discov- 
ery and  occupation  by  the  various  European  nations,  became 
nationalized.  Its  economic  life  was  moulded  by  the  exercise 
of  national  authority.  The  cities  which  have  arisen  bear  no 
resemblance  to  the  medieval  municipality.  They  have  little 
or  no  separateness  of  economic  interests.  Their  manufactures 
come  from  without.  They  sell  their  own  manufactures  with- 
out. Their  industries  depend  upon  the  prosecution  of  indus- 
tries in  many  and  distant  parts  of  the  nation.  Keference  is 
frequently  made  to  some  particular  city  as  being  enterprising 
and  flourishing.  A  little  closer  study  reveals  the  fact  that  only 
a  small  portion  of  its  prosperity  is  due  to  internal  causes.  The 
prosperity  of  the  modern  city  depends  upon  the  prosperity  of 
the  nation  as  a  whole.  Its  economic  interests  are  closely  inter- 
woven with  the  economy  of  the  nation.  Whatever  affects  the 
national  economy,  affects  each  city.  The  city  is  but  a  member 
of  the  body  and  derives  its  life  and  health  from  the  body. 

It  was  not  so  with  the  medieval  municipality  of  Europe.  At 
first  its  economy  was  wholly  disconnected  from  that  of  every 
other  city,  and  from  an  economic  standpoint  it  was  no  part  of 
the  nation.  Trade  and  industry  were  wholly  controlled  from 
within.     Its  economy  was  purely  local.     Its  trade  was  inter- 


112  DESCRIPTIVE  ECONOMICS. 

municipal.  Even  after  a  centralized,  national  authority  began 
to  legislate  and  look  after  economic  matters,  the  cities  main- 
tained their  economic  autonomy  by  charters  which  they  secured 
from  the  crown,  sometimes  in  return  for  civic  influence,  some- 
times as  a  condition  of  rendering  civic  allegiance,  and  some- 
times by  outright  purchase.  Their  treasuries  were  full,  and 
royal  treasuries  were  in  a  precarious  condition. 

The  Medieval  City  the  Pattern. — It  follows  from  what 
was  said  in  the  last  paragraph  that  discussion  of  city  econom- 
ics relates  mainly  to  the  condition  of  things  which  existed 
among  the  towns  and  cities  which  arose  in  western  and  central 
Europe  during  the  middle  ages.  The  economic  conditions 
connected  with  their  origin  and  development,  are  known,  to  a 
partial  extent  at  least,  and  can  be  classified  and  analyzed.  In 
the  Orient  the  rise  of  cities  from  an  economic  standpoint  is 
beyond  the  pale  of  historic  research.  Details,  especially  relat- 
ing to  economic  matters,  are  wholly  wanting  and  can  never  be 
supplied.  Inquiry,  therefore,  relating  to  the  character  of 
municipal  economy  in  the  East,  prior  to  the  existence  of 
national  economy  and  the  nationalization  of  cities,  must  be 
vague  and  unsatisfactory.  It  is  understood,  therefore,  that 
the  illustrations  of  city  economics  relate  to  the  medieval  Euro- 
pean cities.  The  language  used  relates  to  the  more  universal 
economic  features  of  the  time,  such  as  characterized  the  econ- 
omy of  all  the  towns  and  cities  of  central  and  western  Europe. 
If  reference  were  made  only  to  the  English  towns,  a  more  pre- 
cise terminology  would  need  to  be  adopted,  and  it  would  be  so 
if  the  discussion  related  to  the  towns  of  Flanders  or  the  German 
towns.  The  aim  is  to  state  the  economic  characteristics  com- 
mon to  them  all,  although  existing  in  some  cases  in  a  less 
developed  state  than  in  others. 

The  Right  of  Burgess-ship. — In  reading  the  history  of 
the  cities  of  the  middle  ages  frequent  reference  will  be  found 
to  the  burghers  and  the  burgess  rights.  The  burghers  or  bur- 
gesses and  their  rights  are  so  closely  connected  with  municipal 
economy  as  to  require  brief  attention.  To  comprehend  the 
subject  it  will  be  necessary  to  go  back  to  village  economics  and 
a  time  when  the  land  was  owned  by  the  village  community. 


THE  TRADER.  113 

At  first  it  was  cultivated  by  the  villagers  in  common.  Then 
it  was  parceled  out  into  holdings,  and  a  holding  was  allotted  to 
each  head  of  a  family  to  be  used  and  cultivated  by  him  until  a 
re-allotment.  At  first,  perhaps,  the  distributions  were  each 
season.  Finally  the  holding  was  used  and  occupied  for  longer 
and  longer  periods  of  time,  until  the  holder  came  to  have  a 
right  to  make  improvements  and  to  sell  them  at  the  next  re-al- 
lotment. Finally,  through  many  intermediate  stages,  each 
member  comes  to  hold  perpetually  for  himself  and  his  family 
the  last  portion  of  land  allotted  to  him.  The  last  step  is  pri- 
vate ownership  in  the  holding.  The  practice  of  making  allot- 
ments is  wholly  abandoned.  About  this  time,  however,  the 
community  has  greatly  increased  in  numbers.  Newcomers 
have  appeared.  There  is  no  land  to  be  allotted  to  them,  how- 
ever. It  is  required  for  the  original  villagers  or  their  descend- 
ants, or  has  become  their  private  property.  Connected  with 
the  holding  of  a  portion  of  the  land  there  are  certain  civil 
rights  and  economic  privileges.  These  privileges  increase  and 
become  more  exclusive  with  the  growth  of  the  village  economy. 
The  original  landholders  and  their  descendants  band  together 
to  keep  the  newcomers  from  securing  the  privileges  connected 
with  citizenship  or  membership  in  the  community.  They 
retain  unto  themselves  exclusive  jurisdiction  over  the  civil 
affairs  of  the  community.  They  alone  have  a  right  to  appear 
in  the  village  assembly,  and  they  make  the  holding  of  land  and 
that  right  to  appear,  the  test  of  citizenship.  When  the  village 
becomes  a  trading  town,  they  have  retained  all  their  old  privi- 
leges, and  the  privileges  themselves  have  assumed  a  new  impor- 
tance. They  become  the  burghers  of  the  town.  No  one  else 
has  the  franchise,  or  rights  of  citizenship.  It  is  a  right  much 
coveted  and  religiously  preserved  among  the  burghers  them- 
selves. They  impose  restrictions  on  the  acquisition  of  citizen- 
ship, so  that  it  cannot  be  easily  acquired.  Among  the  privi- 
leges which  the  burghers  assert  for  themselves,  is  : 

The  Trading  Privilege. — The  right  to  carry  on  an  inde- 
pendent trade  was  connected  with  the  right  of  burgesship.    The 
burghers  as  a  body  reserved  to  themselves  a  monopoly  of  trade. 
They  enacted  market  regulations  by  which  they  sought  to  keep 
& 


114  DESCRIPTIVE  ECONOMICS. 

out  traders  from  other  towns.  They  banded  together  for  their 
common  advantage,  both  in  controlling  the  home  market  and 
in  procuring  trading  rights  in  other  towns.  Every  one  who 
did  not  possess  the  rights  of  citizenship  was,  to  them,  a  for- 
eigner, and  therefore  the  residents  of  the  town  who  did  not 
have  the  franchise,  as  well  as  the  inhabitants  of  other  cities, 
were  debarred  from  trade,  excepting  under  regulations  which 
were  supposed  to  work  to  the  advantage  of  the  burgher  class. 
A  stranger  could  not  sell  to  any  one  except  a  burgher,  nor  buy 
of  any  one  except  a  burgher. 

The  Merchant  Gild.- -The  discussion  of  the  rights  of 
burgess-ship  and  the  burgess  trading  privileges,  leads  to  one 
of  the  most  important  subjects  connected  with  the  economics 
of  the  city — the  merchant  gild  or  hanse.  It  was  a  union  for 
economic  purposes  of  the  inhabitants  of  each  town  who  pos- 
sessed the  right  to  trade.  A  numerical  statement  of  the  chief 
economic  features  of  the  merchant  gild  would  embrace  the  fol- 
lowing: 

1.  Its  Membership. — This  consisted  of  the  burgesses  and  such 
persons  as  were  admitted  to  the  rights  of  citizenship,  or  upon 
whom  the  burgesses  conferred  trading  privileges.  Among  the 
earlier  gild  organizations,  possession  of  the  burgess-shij)  or 
citizen  franchise,  was  the  prime  requisite  for  admission  into 
the  society.  At  a  later  date  merchants  from  other  towns  were 
admitted.  Membership  once  acquired,  usually  descended  to 
heirs,  and  could  be  transferred.  The  membership  of  the  early 
gilds  was  not  by  any  means  composed  exclusively  of  merchants, 
or  those  who  devoted  their  time  to  trading.  The  right  of 
burgess-ship  involved  the  holding  of  land,  and  at  first  many  of 
the  burgesses  were  agriculturists.  At  the  same  time,  however, 
their  right  of  burgess-ship  entitled  them  to  membership  in  the 
gild,  and  they  usually  took  advantage  of  it.  Indeed,  they 
were  obliged  to  take  advantage  of  it  in  order  to  freely  sell  their 
own  products  and  buy  of  others  in  the  open  market. 

2.  Its  Objects. — The  main  purpose  of  the  merchant  gild  or 
hanse  was  to  obtain  and  maintain  for  the  burgess  members,  the 
exclusive  privilege  of  carrying  on  trade  in  the  town — "A  priv- 
ilege," as  Mr.  Ashley  says  in  his  English  Economic  History, 


THE   TRADER,  115 

"which  implied  the  possession  of  a  monopoly  of  trade  in  each 
town  by  the  gild  brethren  as  against  its  other  inhabitants,  and 
also  liberty  to  trade  in  other  towns." 

3.  Its  Organization. — The  body  held  stated  meetings,  which 
in  England  were  called  "Morning  Speeches."  There  were  one 
or  two  annual  meetings  of  a  more  solemn  nature.  At  these 
meetings  regulations  relating  to  the  exercise  of  trade  by  the 
members  as  against  non-members,  were  presented  and  adopted. 
It  was  frequently  ordered  that  no  sales  should  be  made,  except- 
ing to  burgesses,  and  no  purchases,  excepting  from  burgesses. 
Breaches  of  the  rules  were  punished  by  fines,  or  by  suspension 
of  the  trading  privilege.  Licenses  to  trade  were  issued  to  non- 
members  and  the  tolls  went  into  the  gild  treasury. 

The  Civic  Authority  of  the  Gild. — The  authority  exer- 
cised by  the  gilds  in  the  enactment  and  enforcement  of  trade 
regulations  was  similar  to  the  authority  exercised  by  modern 
municipalities  in  the  enactment  of  local  municipal  ordinances. 
The  possession  of  such  authority  by  the  gilds  is  explained  by 
the  fact  that  their  membership  composed  also  the  ruling  class 
of  the  town.  The  gild  organization  was  often  superior  to  the 
civil  organization,  and  the  gilds  had  no  difficulty  in  procuring 
from  the  civil  authorities  the  grant  of  such  powers  as  they 
desired.  Even  after  the  crown  came  to  take  a  hand  in  legisla- 
tion, the  gilds  possessed  sufficient  influence  united  with  that 
of  the  civil  authorities,  to  obtain  for  the  gild  or  the  town, 
charters  conferring  a  monopoly  of  trade. 

The  Practical  Lessons  of  the  Merchant  Gild  System, — 
Discussion  of  the  merchant  gild  system  and  of  the  control  of 
trade  by  the  burgess  class  may  seem  to  have  little  practical 
value,  because  it  represents  a  system  that  has  fallen  into  dis- 
use. The  same  criticism  may  be  urged  against  much  of  the 
discussion  under  the  head  of  economics  of  the  city.  There  are 
practical  and  important  lessons  connected  with  these  subjects, 
however.  While  the  merchant  gild  system  has  disappeared  with 
the  disappearance  of  municipal  economy,  its  mark  is  found 
impressed  upon  the  economy  of  the  modern  nation.  The  reg- 
ulations adopted  by  many  modern  nations  for  the  control  of 
international  commerce  by  and  in  behalf  of  the  citizens  of  the 


116  DESCRIPTIVE  ECONOMICS. 

nation,  are  the '  legitimate  fruit  of  the  regulations  of  the 
medieval  towns  for  the  control  of  inter-municipal  trade  by 
the  townsmen.  In  the  family  stage  of  economics,  trade  was  a 
tribal  matter.  In  the  village  stage  the  trading  privilege  of  the 
individual  was  slightly  enlarged,  but  the  community  as  a  com- 
munity regulated  exchanges.  We  have  just  seen  how  inde- 
pendent and  exclusive  trading  privileges  were  conferred  upon, 
and  asserted  by,  the  individual  in  the  city  stage  of  economics, 
subject  to  such  restrictions  as  were  supposed  to  work  to  the 
advantage  of  the  town.  When  the  national  stage  of  economics 
is  reached,  it  will  be  seen  that  while  every  citizen  of  the  nation 
is  free  to  trade  at  will  with  every  other  citizen,  and  the  trading 
privilege  becomes  universal  throughout  the  nation,  yet  attempts 
are  made  to  so  regulate  international  trade  and  restrict  trade 
with  citizens  of  other  nations  that  the  nation  at  large  may  be 
benefited.  The  regulation  of  intermunicipal  trade  during  the 
stage  of  municipal  economics  should  be  understood  therefore, 
before  a  clear  conception  can  be  had  of  the  nature  and  origin 
of  the  regulation  of  international  trade  in  the  succeeding  stage 
of  national  economics. 


THE  CRAFTSMAN.  117 


CHAPTER   11. 
THE    CRAFTSMAN. 

The  Growth  of  Manufactures. — In  the  village  community 
there  were  the  smith  and  the  carpenter  and  representatives  of 
such  crafts  as  were  necessary  for  the  daily  life  of  the  com- 
munity. The  smith  repaired  the  plows  of  the  community,  and 
made  them  as  they  were  ordered.  He  also  made  the  iron  work 
which  was  used  about  the  carts  and  the  rude  agricultural 
implements.  The  village  craftsmen  manufactured  as  their 
handiwork  was  wanted,  using  the  materials  which  the  customer 
brought  them.  Their  existence,  however,  implying  the 
presence  in  the  community  of  a  class  of  persons  devoted  to  craft 
work,  brings  forth  another  distinction  between  the  economics  of 
the  family  and  the  economics  of  the  village.  When  family 
economics  prevailed  there  was  no  artisan  class,  no  persons  who 
devote  themselves  to  craft  work  as  an  occupation.  "  Their 
appearance  marks  the  second  stage  in  the  history  of  industry, 
the  transition  from  the  family  system  to  the  artisan  system." 
But  the  merchant  class  precedes  the  artisan  class.  The  growth 
of  the  merchant  class,  which  was  described  in  the  last  chapter, 
accompanied  by  the  rise  of  cities,  produces  a  state  of  affairs 
in  which  a  large  number  of  persons  are  devoting  themselves  to 
trade.  This  means  that  a  corresponding  number  of  persons 
must  devote  themselves  to  the  work  of  transforming  the  raw 
agricultural  products  and  the  raw  foreign  imports  into  manu- 
factured commodities  such  as  will  satisfy  the  wants  of  the  great 
commercial  class.  Manufacturing  for  the  open  market  now 
commences  in  earnest.  Commodities  are  made  for  the  purpose  of 
supplying  the  wants  of  persons  outside  the  town  and  outside  the 
immediate  group  to  which  the  manufactures  belong.  The  smith 
differentiates  into  the  blacksmith,  the  wagoumaker,  the  plow 
maker  and  the  tool  maker.     The  weaver  ceases  to  be  tailor  and 


118  DESCRIPTIVE  ECONOMICS. 

dyer  also,  and  two  more  occupations  connected  with  cloth 
arise.  The  leather  merchant  ceases  to  be  butcher.  So  it  goes 
through  all  the  branches  of  industry. 

The  Burghers  and  the  Artisans. — The  village  craftsmen 
were  members  of  the  communal  village  organization — that  is, 
they  had  the  right  to  hold  land  and  the  right  to  appear  in  the 
village  assembly.  They  were  everywhere  the  equal  of  the  other 
members  of  the  community.  Sometimes  they  occupied  a 
higher  place  in  the  community  councils  than  other  members 
and  were  exoflBcio  village  officers.  When  the  village  becomes 
a  trading  town  they  have  all  the  rights  of  burgess-ship,  includ- 
ing the  right  to  engage  in  trade.  Trading  is  the  most  honor- 
able, as  well  as  the  most  profitable  occupation  of  the  time. 
The  burghers,  possessing  exclusive  trading  privileges,  gradually 
abandon  the  prosecution  of  their  crafts  and  become  merchants, 
members  of  the  merchant  gilds  and  identified  with  the  ruling 
class  of  the  towns.  Their  places  as  artisans  are  filled  by  new- 
comers from  the  surrounding  country,  and  from  the  neighbor- 
ing villages  which  are  not  fortunate  enough  to  develop  into 
trading  towns.  The  newcomers  are  not  citizens  ;  they  are  not 
landholders  and  have  not  the  rights  of  burgess-ship.  They 
cannot  become  merchants.  They  become  aa  artisan  class  and 
m  many  cases  there  begins  a  struggle  between  this  artisan  class 
on  the  one  hand  and  the  merchant-burgher  class  on  the  other, 
which  continues  until  the  towns  are  nationalized. 

The  Craft  Gilds. — The  members  of  the  new  artisan  class 
find  themselves  face  to  face  with  the  governing  body  of  the 
town  composed  of  the  burgher  merchants.  The  merchants 
control  the  municipal  organization,  and  endeavor  in  all  ways 
to  make  themselves  supreme  in  the  exercise  of  civil  authority 
and  to  preserve  their  monopoly  of  trade.  It  is  about  a  century 
after  the  institution  of  the  merchant  gilds.  The  artisans  find 
that  the  merchants,  by  means  of  their  gilds,  are  perfectly 
organized.  The  merchant  gild  system,  furthermore,  has 
differSiitiated.  Instead  of  one  gild  for  all  merchants  and  all 
persons  engaging  in  trade,  each  branch  of  trade  now  has  its 
own  gild.  The  combination  for  the  preservation  of  the  old 
rights  remains  unbroken.     The  various  merchant  gilds  com- 


THE   CRAFTSMAX.  119 

bine  for  the  preservation  of  the  old  merchant  rights.  The 
artisans  find  it  necessary  to  organize  also,  if  they  are  to  secure 
either  the  rights  of  burgess-ship  or  the  liberty  to  carry  on  their 
crafts  independently  of  the  authority  of  the  burghers.  The 
result  is  the  craft  gilds. 

The  Character  of  the  Craft  Gilds. — According  to  the 
definition  of  Ashley,  they  *' were  associations  of  all  the  artisans 
engaged  in  a  particular  industry,  in  a  particular  town  for  cer- 
tain common  purposes."  Briefly  stated,  these  purposes  were, 
to  wrest  from  the  burgher-merchant  oligarchy,  rights  of 
burgess-ship  and  the  right  to  have  independent  craft  organiza- 
tions or  gilds.  The  artisans  want  to  be  citizens  and  they 
want  to  regulate  the  industries  with  which  they  are  connected. 
They  desire  to  exercise  jurisdiction  over  their  own  members 
apart  from  the  authority  of  the  municipality,  and  apart  from 
the  authority  of  the  trading  monopoly.  The  gilds  of  the 
weavers,  assisted  shortly  by  those  of  the  bakers,  led  the 
struggle.  The  contest  was  similar  in  character  in  all  the 
European  towns. 

The  Success  of  the  Craft  Gilds. — The  struggle  of  the 
craftsmen  for  civil  and  economic  rights  was  a  long  one.  The 
time  required  was  considerable,  because  it  meant  a  great  eco- 
nomic change  which  would  naturally  occur  very  slowly.  The 
merchant  burgesses  gradually  lost  the  exclusive  rights  of 
burgess-ship  which  they  had  always  asserted,  and  the  craftsmen 
acquired  equal  rights.  The  artisan  class  was  admitted  into  the 
councils  of  the  municipalities  upon  equal  terms  with  the 
burghers,  and  procured  municipal  legislation  in  favor  of  the 
craft  gilds,  of  the  same  general  character  as  that  which  the 
merchant  gilds  had  formerly  procured,  so  that  by  the  time 
the  municipal  system  of  economy  reached  its  highest  develop- 
ment, the  craft  gilds  came  to  exercise  jurisdiction  over  all 
branches  of  industry.  They  regulated  hours  of  work,  the 
instruction  of  apprentices  and  described  minute  details  relating 
to  the  conduct  of  each  craft. 

The  Practical  Lessons  of  the  Craft  Gilds. — The  story 
of  the  development  of  the  craft  gilds  has  a  lesson  as  well  as 
that  of  the  merchant  gilds.     It  is  valuable,  not  only  as  bear- 


120  DESCRIPTIVE  ECONOMICS. 

ing  upon  the  organization  of  industry  during  the  economic 
stage  to  which  it  relates,  but  as  representing  nascent  industrial 
organization.  The  craft  gilds  represent  the  beginning  of  the 
organization  of  labor,  which  has  attained  such  magnitude  and 
perfection  in  modern  times,  and  a  just  conception  of  this 
modern  or  national  organization  must  include  some  knowledge 
of  the  earlier  or  municipal  organization.  The  rise  of  the  craft 
gilds  and  the  organization  of  the  crafts  have  a  practical  bear- 
ing also  upon  the  subject  of  the  rise  of  economic  classes, 
which  is  discussed  in  the  following  chapter. 


THE  RISE  OF  ECONOMIC   CLASSES.  121 

CHAPTER  III. 
THE     RISE    OF     ECONOMIC    CLASSES. 

The  Early  Communal  Life. — Turning  back  to  the  chap- 
ters on  "  The  Capital  of  the  Family"  and  **The  Village  Com- 
munity "  it  is  found  that  in  the  earlier  economic  stages  there 
are  no  distinctions  of  class.  It  is  a  communal  life  involving 
community  of  living.  Every  member  of  the  primitive  village 
community  has  an  equal  interest  in  all  the  produce  of  labor, 
and  property  is  held  and  enjoyed  in  common.  Every  man  is 
supposed  to  do  as  much  for  the  common  support  and  sub- 
sistence as  every  other  man,  and  all  the  members  of  the  com- 
munity are  equally  rich.  The  customary  duty  which  devolves 
upon  each  member  of  the  community  to  work  for  the  common 
welfare,  was  rigidly  enforced  among  the  partially  agricultural 
Indians  of  America.  Living  in  large  households,  the  matron  of 
the  house  was  invested  by  custom  with  considerable  authority 
over  the  members  of  the  group.  She  made  each  one  perform  a 
proper  share  of  labor,  and  the  brave  who  would  not  hunt  or 
hoe  corn  was  soon  driven  out.  In  modern  times  the  economy 
of  the  communal  life  is  illustrated  by  the  economic  systems  of 
some  of  the  partially  agricultural  tribes  of  Africa  and  Oceanica 
and  among  the  indigenous  tribes  of  Algeria. 

A  Liandless  Class,  may  originate  (1)  by  conquest  or  (2)  in 
the  orderly  course  of  economic  development. 

(1.)  In  case  of  the  conquest  of  one  people  by  another  the 
conquerors  enter  into  the  actual  occupation  of  the  conquered 
territory.  They  do  not  cultivate  the  land  themselves  but 
simply  assert  the  legal  ownership.  For  the  purpose  of  a  divis- 
ion of  the  spoils,  the  whole  territory  is  apportioned  among 
them  without  reference  to  the  presence  of  the  original  inhabi- 
tants. Each  victor  becomes  the  lord  of  the  domain  apportioned 
to  him  and  the  original  dwellers  are  his  vassals.  He  reserves 
for  his  individual  use  a  portion  of  his  territory  and  subdivides 


122  DESCRIPTIVE  ECONOMICS. 

the  balance,  setting  off  a  subdivision  for  the  use  of  the  vassals 
whom  he  is  disposed  to  favor.  Those  who  receive  allotments 
render  their  dues  to  the  lord  by  contributing  to  his  storehouse 
a  customary  portion  of  the  produce  of  their  holdings,  or  by 
working  his  land.  Sometimes  they  do  both.  In  the  Chapter, 
"  The  Land  and  the  Laborer,"  in  connection  with  the  dis- 
scussion  of  serfdom,  statement  was  made  of  these  facts  from 
a  slightly  different  point  of  view.  Those  who  hold  land 
at  the  will  of  the  lord  or  by  tenure  are  his  serfs.  They 
emerge  from  the  condition  of  serfdom  very  gradually. 
The  basis  of  their  growth  out  of  the  servile  state  is  an 
increasing  proprietory  interest  in  their  holdings.  The  fact 
that  men  have  once  received  an  allotment  gives  them  a  continu- 
ing right  to  one,  and  finally  custom  decrees  them  a  vested 
right  irrespective  of  the  will  of  the  lord. 

Thenceforth  they  are  factors  in  the  community.  A  sharp 
distinction  is  drawn  between  them  and  the  men  who  fail  to 
receive  an  allotment  from  the  lord.  One  is  the  landed  class 
and  the  other  is  the  landless  class.  The  landless  class  must, 
perforce,  take  service  with  the  lord  or  with  the  richer  vassals. 
Having  once  become  serving  men,  they  and  their  descendants 
remain  serving  men  for  generations  and  until  the  economy  of 
land  has  taken  a  different  form. 

(2.)  Assuming  an  early  village  community  of  freemen,  each 
member  is  entitled  to  the  use  of  a  portion  of  the  arable  land. 
By  degrees  the  right  ripens  into  a  right  of  permanent  possession, 
and  finally  the  land  becomes  private  property.  But  during 
the  time  these  changes  in  the  organization  of  the  land  are 
taking  place,  the  village  is  increasing  in  numbers.  Outsiders 
are  coming  in.  If  the  village  happens  to  become  a  market 
town  the  influx  of  newcomers  is  correspondingly  large.  It  is 
at  all  times,  however,  diflBcult  for  a  newcomer  to  acquire 
membership  in  the  community.  Membership  is  associated 
with  the  right  to  hold  land.  But  the  land  has  been  parcelled 
out.  Unless  one  of  the  members  of  the  village  dies,  leaving 
no  heirs,  there  will  be  no  opportunity  for  newcomers  to  obtain 
a  share.  Most  of  them  must  remain  landless.  They  become  a 
non-member  and  landless  class,  as  opposed  to  the  villagers  prop- 


THE  RISE   OF  ECONOMIC   CLASSES.  123 

er,  who  are  the  landholders.  Of  course,  the  body  of  this  non- 
member  class  is  at  first  very  small,  as  compared  with  the  whole 
population. 

Medieval  and  Modern  Citizenship. — In  modern  times 
citizenship  is  acquired  by  residence,  and  the  rights  of  citizen- 
ship have  come  to  be  associated  with  a  man's  domicile.  This 
fact  is  likely  to  beget  misunderstanding  of  the  nature  of 
medieval  citizenship.  A  mere  resident  of  the  medieval  town 
or  city  was  not  "free  of  the  city."  He  might  reside  there  for 
years  and  not  become  a  citizen.  The  distinction  was  so  clearly 
pointed  out  in  the  discussion  of  the  burgher-merchant  class 
that  it  is  hardly  necessary  to  repeat  it  here.  The  newcomers 
in  the  town,  referred  to  in  the  preceding  paragraph,  were 
residents  merely  and  not  citizens.  The  body  of  residents,  how- 
ever, grows  very  fast,  as  compared  with  the  growth  of  the 
citizen  class,  and  the  classes  begin  to  entertain  a  mutual  dis- 
trust and  suspicion  of  each  other.  The  old  class — the  citizens 
proper — possessed  of  the  rights  of  burgess-ship,  look  upon  the 
new  body  of  non-burgesses  as  a  hostile  force.  This  new  body 
of  residents  is  composed  mainly  of  craftsmen. 

The  Burghers  and  the  Craftsmen. — In  the  last  chapter, 
the  contest  between  the  merchant-burghers  and  the  craftsmen 
was  set  forth  in  considerable  detail  for  the  purpose  of  illustrat- 
ing the  development  and  organization  of  trade  and  industry. 
That  contest  is  now  worthy  of  careful  study  as  illustrating  the 
rise  of  economic  classes.  It  is  not  necessary  to  re-state  all  the 
features  of  the  contest.  It  may  be  now  viewed  in  a  new  light 
and  for  a  different  purpose — as  a  contest  of  economic  classes.  It 
was  a  collision  "  between  the  old  trading  and  the  new  indus- 
trial elements."  The  new  elements  organized,  for  the  purpose 
of  not  only  acquiring  rights  of  citizenship,  but  of  protecting 
class  rights.  In  the  end  as  we  have  seen,  the  new  body  of 
craftsmen  succeeded  in  acquiring  equal  rights  with  the  old 
body  of  burgher  merchants,  and  in  some  cases  they  became 
uppermost.  The  environment  of  the  city  is  enough  to  instill 
a  desire  for  economic  equality  in  the  minds  of  the  new  class  of 
craftsmen.  The  saying  of  the  time  was  :  "  City  air  makes 
free."    In  many  instances  the  members  of  the  crafts  come 


124  DESCRIPTIVE   ECONOMICS. 

from  the  rural  districts  where  the  feudal  system  and  the  hold- 
ing of  land  by  tenure  still  exists.  In  the  city  they  find  that 
the  citizens  own  the  land  and  are  freeholders.  The  incentive 
to  rise  in  the  economic  scale,  is  strong,  therefore. 

Differentiation  among  Crafts. — After  the  craftsmen  have 
obtained  the  rights  of  citizenship  equally  with  the  'old  burgher 
class,  and  manufacturing  has  become  a  stated  employment, 
there  begins  a  differentiation  of  employment  among  the  crafts- 
men. Prior  to  this  there  is  little  distinction  between  employer 
and  employee.  The  master  and  the  journeyman  work  side  by 
side.  Each  man  owns  his  tools  and  toils  with  his  hands. 
There  is  no  collision  of  interest.  The  journeyman  may  aspire 
to  the  hand  of  the  master's  daughter.  But  now  capital  becomes 
more  important.  It  becomes  impossible  for  every  journeyman 
to  set  up  in  business  for  himself,  as  formerly.  The  body  of 
craftsmen  has  become  so  large  that  few  of  them  can  look  for- 
ward to  a  time  when  they  will  be  master  craftsmen.  Instead 
of  the  raw  material  being  brought  to  the  artisan  to  be  worked 
up  to  order  and  made  into  such  manufactured  commodities  as 
the  owner  of  the  material  desires,  it  begins  to  be  the  practice 
for  the  artisan  to  buy  his  own  materials  and  make  up  a  supply 
of  goods  for  future  demand.  He  becomes  a  manufacturer. 
As  a  result  of  these  things  there  comes  into  existence  among 
the  craftsmen  "  a  working  class,"  as  distinguished  from  the 
employers,  and  with  the  introduction  of  the  working  class 
comes  the  collision  between  employer  and  employee,  and  the 
perplexing  economic  theme  known  as  ''the  labor  question." 

Modern  Class  Divisions. — In  modern  times  possession  or 
non-possession  of  land  has  ceased  to  be  the  basis  of  the  divis- 
ion of  classes.  There  is  no  landless  class  or  landed  class.  It 
is  true  that  one  part  of  the  population  owns  land  and  the  other 
part  is  landless.  It  is  not  because  of  the  organization  of  land, 
however.  There  are  no  conditions  attached  to  ownership 
which  render  it  impossible  for  some  to  obtain  a  portion.  This 
is  especially  true  in  the  United  States.  Every  man  may  be  a 
landholder.  Distinctions  of  class  now  relate  to  the  quantity 
and  the  character  of  the  capital,  either  land  or  personal  prop- 
erty, possessed  by  the  individuals  composing  the  class,  and  the 
class  divisions  are  as  follows  : 


THE  RISE  OF  ECONOMIC  CLASSES.  126 

1.  Tlie  Autonomous  Producing  Class.  This  division  is 
made  upon  the  basis  of  the  quantity  of  capital  possessed.  The 
members  qI  the  class  have  sufficient  capital  to  keep  them 
employed,  and  by  personally  managing  and  utilizing  it,  they 
derive  an  income  sufficient  for  their  support.  They  are  not 
compelled  to  sell  their  services  or  to  employ  the  services  of 
others.  In  many  respects  it  is  a  desirable  economic  state  and, 
other  things  being  equal,  that  nation  which  possesses  the  great- 
est number  of  this  class  is  less  likely  to  experience  civil  or  eco- 
nomic revulsions.  A  large  number  of  small  landholders — 
peasant  holders  they  are  called  in  Europe — in  proportion  to 
the  aggregate  population,  will  tend  to  ensure  a  well  rounded 
national  economy. 

2.  The  Professional  Class.  Professional  men,  like  lawyers 
and  physicians,  are  autonomous  producers.  They  support 
themselves  by  the  personal  management  of  their  capital,  which 
consists  of  their  technical  skill  and  training.  This  capital, 
however,  is  so  different  in  character  from  the  capital  of  the 
peasant  landholder,  for  instance,  that  the  class  may  be  placed 
by  itself.  The  division  is  according  to  the  character  of  the 
capital,  not  according  to  the  quantity. 

3.  The  E7nployer  Class,  includes  all  those  who  possess  such 
a  quantity  of  capital  that  they  cannot  utilize  it  by  their  own 
labor.  They  are  compelled  to  hire  the  services  of  others  to 
assist  them.  Their  share  of  the  results  of  labor  are  the 
"  profits  "  of  the  undertaking. 

4.  The  Employe  Class.  The  employes,  like  the  professional 
men,  are  distinguished  by  the  character  of  their  capital,  which 
consists  of  their  muscular  and  mental  capacities.  They  have  no 
material  possessions  to  manage  atid  must  sell  their  services. 
Their  share  of  the  results  of  labor  is  wages.  This  class  includes 
all  who  serve  others  for  fixed  wages,  The  term  "  laboring  class," 
as  commonly  used  to  distinguish  the  employe  class  from  the 
other  classes,  is  misleading.  It  assumes  that  no  one  else  labors. 
The  employer  is  frequently  the  hardest  worked,  most  care-worn 
person  about  the  establishment.  Every  living  thing  labors. 
Labor  is  one  of  the  conditions  of  existence. 

5.  The  Pauper  Class,  is  not  strictly  a  division  upon  the 


126  DESCRIPTIVE  ECONOMICS. 

basis  of  the  quantity  or  the  character  of  capital  possessed,  but 
it  is  nevertheless  worthy  of  consideration  as  one  of  the  great 
economic  classes.  Much  economic  legislation  looks  toward  the 
reduction  of  the  numbers  of  this  class  and  the  prevention  of 
pauperism.  The  class  furnishes  one  of  the  great  economic 
problems.  It  is  supported  by  taxation.  The  employer  pays 
taxes  according  to  the  amount  of  his  capital.  But  in  propor- 
tion as  his  taxes  are  large,  he  will  have  less  profits  to  distribute 
among  his  employes  in  the  shape  of  wages,  and  therefore  tax- 
ation falls  upon  the  employe  also.  The  pauper  class  therefore, 
and  the  criminal  class  also,  are  supported  by  all  the  other 
classes  combined. 

Classes  not  Castes. — Every  person,  especially  in  the  United 
States,  has  the  power  to  belong  to  either  of  the  economic  classes 
which  have  been  mentioned.  It  rests  with  him.  The  classes 
are  not  like  the  castes  of  Asia.  Membership  in  the  caste  is 
determined  by  birth,  and  once  a  member,  always  a  member. 
The  child  belongs  to  the  caste  of  its  parents,  and  there  is  no 
possibility  of  rising.  It  is  an  immutable  social  order.  Class  is 
not  a  social  order,  but  an  economic  division.  The  better  teach- 
ing of  economics  is  that  every  man  is  the  arbiter  of  his  eco- 
nomic state,  and  there  is  no  "law"  which  relegates  an  indi- 
vidual to  a  particular  class,  without  hope  of  escape. 


MONEY  THE  MEDIUM  OF  EXCHANGE.  127 


CHAPTER  IV. 
MONEY  THE  MEDIUM  OF  EXCHANGE. 

The  Common  Third  Medium  of  Exchange. — In  the  pre- 
vious chapter  entitled  "The  First  Forms  of  Money,"  there  was 
a  statement  of  the  means  by  which  exchanges  were  facilitated, 
before  the  introduction  of  coinage.  It  consisted  of  the  use  of 
a  common  third  medium  selected  with  a  view  to  the  universal- 
ity of  the  demand  for  it  combined  with  its  divisibility,  dura- 
bility and  transportability.  The  commodity  employed  as  a 
common  third  medium  of  exchange  assumed  a  higher  charac- 
ter as  industrial  society  developed.  In  the  hunter  state,  the 
skins  of  fur  bearing  animals  formed  an  appropriate  medium 
of  exchange.  In  the  pastoral  state,  the  cattle  became  money. 
In  the  agricultural  state,  the  cereals  were  used.  Even  the 
very  best  of  the  mebhods  of  exchange,  which  could  result  from 
this  style  of  "trucking,"  would  be  inconvenient  as  compared 
with  modern  methods.  But  economic  activity  was  carried  on 
under  great  inconvenience  as  compared  with  the  facilities  of 
to-day,  and  to-day  the  precious  metals  are  deemed  none  too 
good  to  form  a  medium  of  exchange. 

The  Rise  of  Trade,  which  takes  place  along  with  the  rise 
of  towns  and  cities  emphasizes  the  need  of  a  more  universal  medi- 
um of  exchange.  It  must  be  a  commodity  for  which  there  is 
a  more  universal  demand  than  for  any  commodity  which  pre- 
cedes the  age  of  commerce.  It  must  be  more  durable  and  bear 
transportation  better.  It  must  be  subject  to  greater  divisibil- 
ity. For  instance,  Venice  was  trading  with  the  far  east. 
Venetian  ships  came  home  loaded  with  spices,  dye  stuffs, 
precious  woods  and  the  luxuries  of  the  east.  The  localities 
where  the  ships  were  loaded  and  where  the  goods  were 
obtained,  had  an  entirely  different  civilization  from  that  of  the 
west.     The  wants  of  the  eastern  people  differed  entirely  from 


138  DESCRIPTIVE  ECONOMICS. 

the  wants  of  the  western  people.  The  Venetian  merchants 
must  procure  their  cargoes  in  exchange  for  commodities  other 
than  the  commodities  in  common  circulation  in  the  west.  The 
division  of  employments  became  enlarged  with  the  rise  of 
commerce  and  the  growth  of  cities.  When  men  devote  them- 
selves to  one  kind  of  labor — to  the  production  of  one  class  of 
wants,  all  their  other  wants  must  be  procured  by  exchange 
and  the  number  of  exchanges  are  indefinitely  increased.  The 
medium  of  exchange  must  be  more  perfectly  adapted  for  its 
office. 

The  Higher  Qualities. — Furs,  cattle,  and  grain  did  well 
enough  as  mediums  of  exchange  when  the  wants  of  the  people 
were  few  and  simple  in  character.  Wants  have  now  become 
more  elevated.  More  costly  mediums  of  exchange  will  natur- 
ally be  chosen,  administering  to  the  more  elevated  wants.  The 
commodity  which  will  meet  the  demands  of  trade  must  have 
the  greatest  possible  circulating  capacity.  There  must  be  the 
greatest  possible  demand  for  it.  It  must  be  acceptable  to  all 
persons,  at  all  times,  in  all  places.  It  must  be  uniform  in 
value  throughout  the  world.  The  man  who  has  this  commo- 
dity must  be  able  to  exchange  it  for  any  other  commodity 
which  he  may  desire,  at  any  time  and  at  any  place.  Finally, 
the  commodity  must  have  the  sanction  of  organized  civil  gov- 
ernment and  it  then  becomes  what  is  called  money. 

Advantages  of  the  Precious  Metals. — They  have  a  num- 
ber of  characteristics  and  qualities  which  give  them  a  peculiar 
fitness  for  the  purposes  of  a  medium  of  exchange.  There  is 
their  costliness  and  rarity  combined  with  the  amount  of  labor 
necessary  to  produce  them.  There  is  a  certain  uniformity  in 
their  distribution  in  the  hemispheres.  They  have  great  trans- 
portability, that  is,  they  are  slight  in  bulk  as  compared  with 
their  exchangeable  value  so  that  large  payments  may  be  made 
without  excessive  cost  of  transportation.  Their  durability  and 
pliability  give  them  a  mechanical  fitness  for  coinage.  Not  the 
least  important  characteristic  is  their  uniformity  of  quality. 
Gold  is  gold  and  silver  is  silver,  wherever  found.  Another 
important  featiire  is  their  diversity  of  use,  and  consequent  uni- 
formity of  price.     Inexpensive  commodities  are  subject  to  great 


MONET  THE  MEDIUM  OF  EXCHANGE.  129 

fluctuation  in  price.  The  fact  that  they  are  capable  of  being 
employed  for  other  purposes  than  for  coinage,  gives  them  both 
a  value  in  use  and  a  value  in  exchange. 

.  Significance  of  the  Money  Economy. — The  money  econ- 
omy which  follows  the  rise  of  commerce  is  the  natural  out- 
growth of  the  truck  economy  which  precedes  it.  Money  was 
doubtless  used  as  a  common  measure  of  value  before  being 
employed  in  transactions  as  a  medium  of  exchange.  The 
use  of  it  brings  men  more  directly  into  economic  dependence 
upon  each  other.  The  absence  of  it  tends  to  isolate  men  in 
their  economic  activity.  When  truck  economy  was  prevalent 
every  commodity  had  two  functions,  it  was  both  goods  and 
money.  With  the  era  of  money  economy,  money  and  goods  are 
separated.  The  use  of  money  is  a  great  stimulant  of  commerce. 
The  villager  is  no  longer  obliged  to  exchange  his  products  in 
the  village.  He  can  go  into  the  market  town  and  sell  his 
wares  for  money  and  purchase  what  he  wants.  If  he  wants  a 
plow  and  there  is  none  in  the  market,  he  can  put  his  money  in 
his  pocket  and  look  for  a  plow  elsewhere.  If  his  goods  come 
to  more  than  the  price  of  a  plow  the  surplus  can  be  kept  for 
future  purchases. 

The  Four  Functions  of  Money. — We  are  now  ready  to 
state  the  uses  or  functions  of  money,  as  follows: 

1.  A  Measure  of  Value. — Suppose  a  peasant  farmer  of  east- 
ern Russia  goes  into  one  of  his  primitive  markets  to  sell  an  ox 
which  he  has  reared.  He  wants  a  fur  coat.  He  finds  a  furrier 
with  such  a  coat.  They  agree,  however,  that  the  ox  is  worth 
more  than  the  coat.  In  other  words,  the  farmer  has  put  more 
labor  into  the  raising  of  the  ox  than  has  been  required  of  the 
furrier  to  make  the  coat.  The  worth  of  commodities  is  the 
amount  of  labor  it  has  taken  to  produce  them.  It  looks  as 
though  the  trade  would  be  blocked.  It  happens  however  that 
tea,  pressed  into  little  bricks,  is  in  universal  demand.  Its 
value  is  well  known.  The  furrier  might  not  want  the  ox,  but 
a  good  supply  of  tea  would  come  handy  for  his  own  use  and 
for  exchanging.  The  farmer  exchanges  his  ox  for  tea  bricks. 
He  then  turns  around  and  gives  the  furrier  as  many  bricks  as 
will  equal  the  value  of  the  coat.  Tea  has  acted  as  a  measure 
9 


130  DESCRIPTIVE  ECONOMICS. 

of  value.  It  measured  the  value  of  both  the  coat  and  the  ox 
in  the  exchange.  Whenever  money  is  used  in  such  a  transac- 
tion, it  becomes  a  measure  of  value. 

2.  A  Medium  of  Exchange. — In  the  second  place  money  is  a 
medium  of  exchange.  In  our  illustration  the  tea  acted  as  a 
medium  of  exchange.  It  was  something  which  all  the  people 
in  the  market  wanted.  The  farmer  trading  his  ox  for  it  might 
get  more  than  he  could  consume  himself,  but  it  is  perfectly 
divisible  and  he  could  exchange  his  surplus  for  other  wants. 
Even  in  very  rude  society,  direct  barter  is  very  inconvenient. 
It  is  no  easy  matter  for  a  man  to  find  someone  who  wants  his 
surplus  of  one  commodity  and  who  has  a  desired  surplus  of 
another  commodity.  In  a  complex  state  of  industrial  society 
direct  barter  is  impossible.  A  pulpit  maker  might  be  hungry 
for  a  long  time  before  finding  a  man  who  would  exchange  pro- 
visions for  a  pulpit.  To  obviate  the  difiiculty  men  agree  upon 
a  universally  acceptable  commodity  which  shall  stand  as  a  mid- 
dle commodity  or  a  medium  of  their  exchanges.  The  precious 
metals,  in  the  form  of  money,  have  so  far  been  found  to  be 
best  adapted  to  fill  the  place  of  this  middle  commodity. 

3.  A  Standard  of  Value. — Money  is  also  a  standard  of  value. 
The  tea  for  which  the  Russian  farmer  exchanged  his  ox  was 
used  as  money  and  became  money  because  it  had  a  natural 
purchasing  power  arising  from  its  general  acceptability.  The 
same  is  true  of  the  other  commodities  which  have  been  used  as 
money  by  various  peoples.  Tea,  however,  is  likely  to  vary  in 
price  from  year  to  year.  A  great  crop  causes  its  value  to  fall 
and  soon  reduces  its  purchasing  power.  The  farmer  who  ex- 
changed his  ox  for  it  would  have  hesitated  to  make  the 
exchange  unless  he  could  get  rid  of  his  surplus  almost  immedi- 
ately and  before  its  price  dropped.  He  would  want  a  com- 
modity which  would  bring  him  as  much  as  he  allowed  for  it 
at  any  future  time,  provided  he  could  get  such  a  commodity. 
Money  in  the  shape  of  the  precious  metals  would  be  such  a 
commodity.  People  who  exchange  their  surplus  for  it,  know 
that  they  can  take  it  whenever  they  get  ready  to  purchase  and 
exchange  it  for  other  wants.  If  they  sell  on  credit,  they  know 
that  when  pay-day  comes  they  will  get  a  commodity  in  payment 


MONEY  THE  MEDIUM  OF  EXCHANGE.  131 

having  as  much  purchasing  power  as  on  the  day  of  sale.  Its 
value  is  reasonably  fixed  and  it  thus  becomes  a  standard  of 
value. 

4.  A  ^tore  of  Value. — The  Russian  peasant  who  exchanges 
his  ox  for  tea  bricks  and  then  migrates  to  America  with  his 
wealth  in  that  form,  would  be  worth  much  less  after  arriving 
here.  His  tea  bricks  would  not  be  in  demand.  The  com- 
modity which  is  to  take  the  place  of  money  must  be  acceptable 
the  world  over,  so  that  value  may  be  stored  up  and  carried 
from  one  part  of  the  globe  to  the  other  without  depreciation. 
What  commodity  is  better  adapted  to  be  a  store  of  value  than 
the  precious  metals  ? 

Government  Coinage. — The  precious  metals  in  their 
natural  state  will  fall  short  of  performing  the  four  functions 
of  money  which  have  just  been  enumerated.  They  must  be 
coined  or  minted  into  forms  of  certain  values  under  the  sanc- 
tion of  government.  The  raw  metal  must  be  fashioned  into 
pieces  of  prescribed  weight  and  fineness,  and  this  must  be  done 
by  government  in  order  to  insure  the  proper  weight  and  purity. 
Government  can  do  nothing  more  toward  creating  money  than 
lies  in  the  regulation  of  the  weight  and  fineness  of  its  various 
coins.  It  can  prescribe  the  number  of  grains  of  gold  which 
shall  go  into  a  dollar  just  as  it  can  determine  how  many  pounds 
of  wheat  shall  make  a  bushel.  It  cannot  take  that  quantity  of 
gold  which  cost  only  a  dime  to  mine  and  mint  and  is  therefore 
worth  only  a  dime  in  the  market  and  make  a  dollar  out  of  it. 
Government  may  stamp  it  a  dollar  and  call  it  a  dollar,  but  it 
will  not  pay  for  a  dollar's  worth  of  labor  or  buy  anything 
which  has  cost  a  dollar's  worth  of  labor.  You  will  understand 
now  what  is  meant  by  people  who  speak  of  money  as  a  creation 
of  government.  Government  legalizes  the  coinage  and  declares 
what  coins  we  shall  have,  but  does  not  create  money  or  create 
value.  Gold  and  silver  as  well  as  all  other  commodities  are 
worth  just  what  it  costs  in  labor  to  produce  them.  These  facts 
have  such  economic  importance  that  they  will  be  repeated  in 
connection  with  the  discussion  of  **The  money  of  the 
Nation." 

Municipal  Economy  Summarized. — At  the  end  of  Part  I 


132  DESCRIPTIVE  ECONOMICS. 

there  was  a  summary  statement  of  the  controlling  features  of 
the  economics  of  the  family.  The  same  plan  was  pursued  at 
the  conclusion  of  Part  II,  and  the  main  characteristics  of 
village  economics  were  summarized.  A  brief  summary  of  city 
economics  will  now  be  in  order. 

1.  Economic  Supremacy  of  the  City. — Agriculture  has  been 
growing  all  the  time  and  the  condition  of  the  rural  districts 
has  been  greatly  ameliorated,  but  the  agricultural  life  has  lost 
its  old  economic  importance.  It  comes  to  the  front  again  some 
centuries  later.  The  city  is  now  supreme  in  the  land.  It  is 
the  highest  economic  factor.  The  industrial  life  of  the  time 
centers  toward  it.  It  acts  upon  all  the  elements  of  industrial 
society  as  a  magnet  upon  a  mass  of  iron  filings.  It  is  not  only  the 
economic  factor,  but  it  is  the  highest  political  factor.  Village 
economy  has  differentiated  and  the  higher  city  economy  is  the 
result. 

2.  The  Rise  of  Trade.  — Trade  is  no  longer  desultory  as  in  the 
family  and  village  stage.  It  is  systematically  pursued  by  men 
who  are  traders  by  occupation.  They  become  the  middle  men 
and  go-betweens  of  those  who  have  exchanges  to  make.  In- 
dustry is  greatly  facilitated  because  the  individual  producers 
who  desire  to  make  exchanges  are  freed  from  the  trouble  of 
finding  each  other,  and  a  great  amount  of  time  is  saved  for 
other  pursuits. 

3.  The  Control  of  Trade  is  in  the  hands  of  the  citizens 
proper — the  landholding  class,  "who  imposed  restrictions  on 
the  acquisition  of  citizenship,  with  the  object  of  protecting 
the  interests  of  those  already  enjoying  it ;  who  acted  together 
by  market  regulation  and  intermunicipal  negotiation  to  secure 
every  advantage  they  could  over  rival  boroughs." 

4.  The  Rise  of  Manufactures. — Manufacture  as  a  distinct 
economic  factor  appears.  It  is  another  branch  of  industry  as 
distinguished  from  agriculture  and  trade.  The  interdepend- 
ence of  the  three  industrial  factors  which  marks  the  economy  of 
the  nation,  is  started  upon  its  career.  The  craftsman  or  artisan 
appears  and  begins  to  buy  the  raw  materials  on  his  own  account, 
and  to  make  up  a  stock  of  commodities  for  future  demand. 

5.  The   Organization   of  Industry,  commencing  with   the 


MONEY  THE  MEDIUM  OF  EXCHANGE.  133 

organization  of  the  traders  and  merchants  for  economic  pur- 
poses and  by  means  of  the  merchant  gild  or  hanse,  grows 
through  the  organization  of  the  artisans  as  a  class  opposed  to 
the  trading  class,  to  the  organization  of  each  craft.  Every 
occupation  that  furnishes  employment  to  a  few  men  has  its 
organization,  and  every  branch  of  industry  has  its  mystery, 
craft  or  art.  Monopoly  of  industry  is  the  object  in  each  case. 
The  town  system  is  identical  with  industrial  organization. 

6.  Class  Distinctions  are  Fixed, — First,  by  the  rise  of  the 
artisan  class  as  opposed  to  the  burgher-merchant  class. 
Secondly,  by  the  differentiation  of  the  artisan  class  into  greater 
and  lesser  crafts  and  the  appearance  of  employers  who  do  not 
work  alongside  of  their  employes  as  was  customary  with 
masters,  journeyman  and  apprentice.  This  means  the  labor 
question  and  the  beginning  of  the  quarrel  between  capital  and 
labor  over  the  division  of  the  profits. 

7.  A  Money  Economy. — Coinage  is  introduced.  Before  the 
institution  of  national  coinage,  each  city  has  frequently  its 
own  monetary  system.  Without  money,  "the  market"  is  local 
and  truck  economy  must  be  practiced.  By  the  use  of  money 
the  market  includes  a  wide  area.  A  world  market  is  now 
possible. 


PART    IV. 

eco:n'omios  of  the  :r^ATioi^. 


CHAPTER  I. 
THE     INDUSTRIAL    STAGE    OF    ECONOMICS. 

The  Nation. — It  may  consist  of  three  conceptions,  accord- 
ing to  the  standpoint  from  which  it  is  viewed.  Geographically, 
a  nation  is  a  people  speaking  one  language,  living  under  one 
government,  independent  of  other  peoples  and  occupying  a 
continuous  area.  Politically,  it  is  an  organization  of  the  whole 
people  for  the  purposes  of  mutual  assistance  from  foreign  inter- 
ference, and  for  the  promotion  of  justice  among  themselves. 
From  an  ethical  point  of  view,  the  nation  is  said  to  be  a 
"moral  personality  vested  with  responsibility  and  authority, 
and  endowed  with  a  peculiar  national  life."  It  is  a  life  not 
possessed  by  the  individuals  composing  it. 

The  Economic  Nation. — These  are  the  historical  concep- 
tions of  the  nation.  Economics  is  more  directly  concerned 
with  the  economic  nation — with  that  body  of  people  which 
might  meet  the  conditions  of  either  or  all  of  the  foregoing 
definitions  and  possess  still  other  characteristics.  The  idea  of  a 
union  of  people  is  involved  in  either  of  the  historical  concep- 
tions. The  economic  nation  may  be  a  union  upon  the 
geographical,  the  political  or  the  ethical  basis,  but  in  addition 
it  is  a  union  upon  an  economic  basis.  It  is  an  industrial 
union,  with  a  centralized  authority  which  regulates  economic 
action  throughout  the  whole  territory.  There  is  great 
diversity  of  individual  pursuits  and  interests,  and  at  the  same 
time  a  close  economic  interdependence  of  the  individuals.   The 

135 


136  DESCRIPTIVE  ECONOMICS. 

aggregate  economic  activity  of  the  people  constitutes  the 
economy  of  the  nation.  The  great  commercial  city  of  the 
middle  ages  was,  in  many  instances,  a  politically  independent 
state,  and  to  that  extent  it  had  a  basis  for  a  national  economy. 
But  its  economic  life  was  wholly  controlled  and  directed  from 
within.  It  was  a  nation  composed  of  a  single  economic  unit, 
and  its  economy  was  municipal.  The  economic  nation  is  com- 
posed of  a  number  of  economic  units,  controlled  as  one  by  a 
widespread  national  authority. 

Sigrniflcance  of  the  Industrial  Stage. — The  economy  of 
the  modern  nation  is  frequently  called  industrial,  because  it 
marks  the  full  and  final  co-operation  of  the  three  great  factors 
of  all  economic  activity — the  co-operation  of  (1)  external 
nature  or  land,  (2)  labor  and  (3)  capital,  accompanied  by  a 
minute  division  of  employments  and  organization  of  industry. 
This  co-operation  originated  with  the  municipal  economy  when 
manufacturing  began  to  play  a  part  in  daily  life.  With  the 
growth  of  manufacturing  came  the  growth  of  capital.  Capital 
then  assumed  a  new  importance.  We  hear  a  great  deal  about 
capital  and  labor,  much  less  about  labor  and  capital,  although 
labor  becomes  an  important  economic  factor  before  capital. 
Labor  is  the  original  factor  and  capital  is  its  product  in  con- 
junction with  nature.  By  labor  is  meant  not  simply  muscular 
strength.  It  includes  all  the  qualities  of  mind  and  the  skill  of 
intellect. 

I^xternal  Nature. — In  the  earlier  stages  of  economics,  ex- 
ternal nature  has  everything  to  do  with  getting  a  living,  and 
labor  and  capital  very  little  to  do  with  it.  In  the  family  stage 
the  gifts  of  nature  are  the  prime  source  of  subsistence.  At  first, 
as  in  the  frugiferous  state,  the  only  labor  involved  is  akin  to 
berry  picking.  The  capital  may  be  a  rude  bark  basket  for 
holding  the  berries.  As  men  learn  to  direct  nature  for  the 
purpose  of  increasing  subsistence  and  satisfying  increasing 
wants,  labor  becomes  more  systematic  and  capital  more 
necessary.  As  population  grows  the  greater  is  the  necessity  of 
controlling  external  nature  which  includes  the  things  without 
value,  as  air  and  light,  and  those  with  value,  like  the  soil,  the 
trees,  the  mines  and  wild  animals.    Nature  has  never  been 


THE  INDUSTRIAL   STAGE  OF  ECONOMICS.  137 

more  lavish  with  her  gifts  at  one  period  than  at  another.  In 
modern  times  they  are  more  extensively  utilized  and  the  utili- 
zation of  them  in  getting  a  living  depends  upon  the  employ- 
ment ef  labor  and  capital. 

Capital  includes  all  the  things  which  men  gather  together 
with  the  possibility  of  using  them  for  the  purposes  of  further 
production.  It  may  be  the  rude  basket  of  the  savage  berry 
picker,  to  which  reference  has  been  made,  or  it  may  be  a 
wonderfully  constructed  machine  used  in  the  arts.  **  Land  and 
labor  are  primitive  forces.  Capital  is  |the  result  of  human  in- 
dustry." It  is  an  accumulation  of  the  results  of  labor  stored  up 
for  future  use. 

Co-operation  of  the  Factors. — The  three  factors,  con- 
sisting of  nature,  or,  as  it  may  now  be  termed,  land,  labor  and 
capital,  have  always  co-existed  since  life  began.  Getting  a  liv- 
ing has  involved  a  co-operation  of  the  three  forces  in  all  stages 
of  industrial  society.  When  co-operation  is  referred  to  as  having 
commenced  with  the  city  stage  of  economics,  it  is  for  the  pur- 
pose of  calling  attention  to  the  fact  that  the  three  factors  then 
began  to  exercise  an  equality  of  force.  Prior  to  the  existence 
of  a  municipal  economy,  there  was  a  marked  difference  in  their 
importance.  In  the  family  stage,  nature  is  dominant.  In  the 
village  stage,  labor  begins  to  play  a  more  important  part.  In 
the  city  stage,  capital  assumes  a  new  importance.  This  predomi- 
nation of  one  of  the  factors  shapes  the  economic  life  of  the 
various  stages.  Having  now  reached  the  economics  of  the 
nation,  we  find  a  mutual  co-operation  and  an  equal  importance 
of  all  the  factors.  Nature,  in  the  shape  of  the  agricultural 
soil,  of  the  forests  and  of  the  mines,  co-operates  equally  with 
labor  and  capital  in  the  processes  of  satisfying  our  wants.  For 
instance,  there  are  fishermen  to-day,  as  there  were  in  the 
hunter  stage.  The  modern  fisherman,  however,  employs 
large  capital  in  the  shape  of  nets,  appliances  and  ships.  Fish- 
ing is  no  longer  a  by-employment.  It  is  a  stated  occupation, 
involving  systematic  labor,  and  the  fisherman  relies  on  the 
activity  of  others  for  the  satisfaction  of  his  other  wants.  There 
are  herdsmen  to-day  as  of  old,  but  compare  the  Hebrew  pas- 
toral patriarchs  with  the  modern  breeder  of  Jerseys.     The 


138  DESCRIPTIVE  ECONOMICS. 

Jersey  breeder  does  not  migrate  with  his  herds  in  search  of 
pasture.  He  employs  capital  in  the  shape  of  stores  of  food. 
He  expends  much  labor  in  the  direction  of  his  enterprise. 
This  state  of  things  emphasizes  the  progress  of  man  in  his  con- 
test with  nature.  Natural  agents  are  appropriated  in  order  to 
satisfy  progressive  wants.  The  utilization  of  natural  agents 
by  means  of  large  capital  directed  by  systematic,  conscious 
labor  marks  the  progress  of  mankind  to  the  highest  of  the 
economic  stages. 

Nature  and  the  Economy  of  the  Nation. — The  physical 
character  of  the  national  territory,  relating  to  soil,  water 
privileges  and  temperature,  is  to  be  taken  into  account  in  study- 
ing the  economy  of  a  nation.  The  importance  of  the  soil  as  an 
economic  factor  relates  to  its  desirability  for  agricultural  pur- 
poses, as  well  as  for  the  mineral  deposits  which  may  be  beneath 
the  surface.  If  it  is  a  purely  agricultural  territory,  agricul- 
tural pursuits  will  predominate.  If  there  are  large  mineral 
deposits,  together  with  resources  of  lumber,  manufacturing 
interests  will  be  encouraged.  Extended  water  privileges,  with 
sea  coasts,  bays  and  harbors,  will  encourage  commerce.  The 
temperature  and  climate  will  govern  the  character  of  the 
agricultural  productions,  and  these  combined  will  frequently 
determine  the  distribution  of  land  into  small  or  large  holdings. 
The  best  territory  is  one  made  up  of  an  elevated  table  land, 
sloping  toward  the  sea.  It  would  have  the  pasturage  of 
Switzerland,  the  agricultural  plains  of  the  Mississippi  Valley, 
the  mineral  deposits  of  Pennsylvania  and  Tennessee,  the  forests 
of  Michigan  and  Wisconsin,  and  the  harbors  of  our  sea  coasts. 
Large  rivers  for  inland  navigation  would  be  quite  an  item. 

Jural  Organization. — Economic  organization  cannot  always 
be  studied  apart  from  jural  or  civil  organization.  Economic 
activity  is  affected  by  legislation  and  administration.  The 
political  organization  which  will  best  encourage  the  economic 
activity  of  the  individual  citizen  and  direct  it  toward  the 
aggregate  well  being,  will  produce  the  highest  national  economy. 
There  must  be  a  well  organized  political  state  in  order  to 
ensure  the  possession  of  private  property  under  peaceful  and 
orderly  conditions.  Without  guaranty  of  the.  rights  of 
property,  economic  progress  is  impossible. 


THE  INDUSTRIAL   STAGE   OF  ECONOMICS.  139 

Agriculture,  Commerce  and  Manufactures,  are  terms 
frequently  used  in  connection  with  the  industrial  stage  of 
economics.  They  go  hand  in  hand  to  make  up  the  economy  of 
the  modern  nation.  Where  they  are  found  most  evenly  balanced, 
there  is  apt  to  be  found  the  highest  and  best  economic  activity, 
and  the  most  widely  distributed  state  of  well  being.  Agricul- 
ture begins  in  the  village  stage,  commerce  in  the  city  stage,  and 
manufacture,  in  the  modern  sense,  commences  in  the  national 
stage.  It  is  progress,  from  the  isolated  economic  life,  in  which 
activity  is  chiefly  directed  to  the  acquisition  of  the  things 
which  will  satisfy  wants  of  necessity,  through  the  prosecution 
of  a  single,  dominant  industry,  to  the  social  economic  life,  in 
which  activity  combines  direct  acquisition,  through  the  prose- 
cution of  all  the  industries,  with  the  employment,  as  a  means, 
of  material  things  already  acquired.  Cities  become  nationalized, 
in  that  they  depend  upon  the  economic  activity  of  each  other. 
One  city  manufactures  one  thing  that  is  wanted,  another  manu- 
factures another.  Commerce  evens  up  by  distributing  the  manu- 
factures. The  cities  depend  upon  the  agricultural  country,  and 
the  agricultural  country  depends  upon  the  manufactures  of  the 
cities.  Each  depends  upon  the  commerce  which  distributes 
their  several  productions.  The  family  economic  life  was  for 
self.  The  village  economic  life  was  for  the  immediate  commu- 
nity of  the  village.  The  national  economic  life  is  not  for  self, 
nor  for  the  immediate  community,  nor  for  the  nation.  It  is 
for  others,  although  '*  others"  may  comprehend  all  the  citi- 
zens of  the  nation.  The  more  prosperous  a  city,  the  more 
prosperous  are  the  neighboring  towns.  The  more  flourishing 
the  towns,  the  more  flourishing  the  adjacent  village  hamlets, 
and  wide-awake  hamlets  are  sure  to  belong  to  thriving  farming 
communities.  Franklin  is  credited  with  saying  that  there  are 
three  ways  for  a  nation  to  acquire  wealth  :  "  The  first  is  by 
war.  This  is  robbery.  The  second  is  by  commerce,  which  is 
generally  cheating.  The  third  is  by  agriculture,  the  only  hon- 
est way."  He  would  not  have  used  that  language  in  this  day. 
It  is  too  well  established  that  an  equilibrium  of  the  three  indus- 
tries means  the  highest  national  welfare,  and  neither  of  them 
is  blameworthy. 


140  DESCRIPTIVE  ECONOMICS. 


CHAPTER  11. 
iIand,  labor  and  capital. 

The  Subject-Matter  of  this  Chapter. — In  the  preceding 
chapter  it  was  stated  that  we  have  arrived  at  a  period  when  the 
three  factors  of  economic  activity — land,  labor  and  capital — 
assume  an  equal  importance.  Their  mutual  relations  are  the 
source  of  the  main  economic  problems  of  the  modern  nation. 
These  relations  famish  not  only  the  economic  problems  but 
the  social  problems  also.  In  combination,  they  are  the  social- 
economic  problems.  The  connection  between  economics  and 
social  economy  is  so  close  that  one  cannot  be  studied  independ- 
ently of  the  other.  The  object  of  this  chapter  is  to  outline 
the  social-economic  problems.  The  expression  **  organization 
of  the  factors,"  may  be  used  to  refer  to  the  mutual  relations 
which  they  sustain. 

What  Is  Involved. — There  is  involved,  first,  the  growth  of 
these  relations  from  the  simplicity  which  existed  in  the  early 
economic  stages,  when  every  man  was  land  owner,  capitalist 
and  laborer,  to  the  complexity  of  modern  times,  when  one  man 
furnishes  the  land,  another  the  labor,  and  a  third  the  capital. 
This  growth  needs  only  incidental  discussion,  since  it  has  been 
referred  to  in  the  chapters  "  The  Land  and  the  Laborer,"  and 
**  The  Rise  of  Economic  Classes."  More  attention  is  required 
to  an  examination  of  the  part  which  each  factor  plays  in  the 
production  of  all  the  wants  of  humanity  and  to  the  division  of 
the  joint  product  between  labor  and  capital. 

Land  and  Labor  without  Capital. — In  order  to  see  what 
the  result  would  be  if  there  were  only  land  and  labor,  without 
proportionate  capital,  it  will  be  necessary  to  refer  to  an  earlier 
economic  stage.  When  the  Spaniards  discovered  Peru,  they 
found  a  landed  system  similar  to  that  which  has  been  described 
as  existing  in  the  village  community.  The  land  was  owned  in 
common  by  all  the  inhabitants,  and  was  cultivated  in  common. 


LAND,  LABOR   AND    CAPITAL.  141 

There  was  a  yearly  division  of  the  arable  soil  among  all  the 
people,  according  to  rank.  The  division  was  made  by  formal 
ceremonies,  and  "to  the  sound  of  music."  But  the  poor  Peru- 
vians had  no  draft  animals,  no  plows,  no  farm  machinery,  no 
"fixed  capital,"  as  it  is  called,  and  could  only  produce  the 
necessities  required  from  day  to  day.  They  could  never  be 
a  rich  nation  without  a  more  even  distribution  of  the  three 
factors. 

The  Ownership  of  the  Land. — This  subject  introduces 
one  of  the  social  economic  problems.  Stripped  of  verbiage, 
the  problem  resolves  itself  to  this  :  Should  the  community 
own  the  land,  as  it  did  in  the  family  and  in  the  village  stage  of 
economics,  or  is  private  ownership  best  ?  There  are  many 
good  and  honest-minded  men  who  believe  that  private  owner- 
ship is  morally  wrong.  They  say  that  land  is  the  source  of  all 
capital,  and  is  the  one  thing  which  makes  labor  productive; 
that  it  is  a  natural  gift  to  all  men  alike.  They  further  point 
out  that  common  ownership,  as  it  existed  in  the  village  com- 
munity, is  the  state  of  nature,  and  private  ownership  has  arisen 
by  the  arrogant  assumptions  of  monarchical  chiefs,  who  have 
robbed  and  despoiled  the  people  of  their  common  proprietary 
interests.  Let  us  return,  they  say,  to  the  system  under  which 
each  member  of  the  community  has  a  usufruct  in  the  soil,  and 
is  entitled  to  a  chance  to  make  his  labor  productive.  Let  us 
do  away  with  free  trade  in  land,  which  is  immoral  and  con- 
trary to  the  plan  of  nature.  Let  the  state  own  the  land  and 
regulate  its  distribution. 

Land  Nationalization,  is  the  name  given  to  one  of  the  pro- 
jects looking  toward  a  wider  distribution  of  the  "natural 
opportunities"  included  in  the  term  land.  It  involves  the  in- 
direct control  of  ownership  by  the  government  through  the 
imposition  of  taxation  upon  the  land.  The  machinery  of  gov- 
ernment and  all  expenses  connected  with  the  social  mechanism 
would,  according  to  this  scheme,  be  procured  from  the  revenue 
of  the  land.  The  state  would  collect  the  annual  rental  value 
of  land  in  itself,  apart  from  improvements.  The  private  owner 
would  be  allowed  to  collect  such  additional  rental  value  as 
might  arise  from  the  improvements  which  he  has  put  upon  the 


142  DESCRIPTIVE  ECONOMICS. 

land.  The  propriety  of  the  scheme  is  founded  on  the  supposed 
fact  that  the  rental  value  of  land  apart  from  improvements  is 
due  mainly  to  the  exertions  of  the  whole  community — to  the 
institutions  of  civil  and  industrial  society.  This,  substan- 
tially, is  the  land  nationalization  scheme  originating  with  Henry 
George.  There  are  some  who  decline  to  accept  it  in  its  entire- 
ty, but  who  think  that  land  municipalization  is  worthy  of  con- 
sideration. The  rental  value  of  a  vacant  city  lot,  they  would 
say,  is  ten  times  as  great  as  the  same  quantity  of  land  ten  miles 
away  in  the  country.  The  work  of  the  community  at  large  in 
building  and  maintaining  the  city  makes  the  difference,  and 
therefore  the  community  ought  to  reap  some  of  the  increased 
benefit,  by  the  municipalization  of  land.  That  is  to  say,  the 
scheme  may  properly  be  applied  in  respect  to  city  land  but  not 
in  .respect  to  agricultural  land. 

Private  Ownership  is  Best. — Those  who  advocate  the 
common  ownership  and  control  of  the  land,  must  claim  for 
their  scheme  an  advantage  to  the  community.  It  is  main- 
tained, however,  that  private  ownership  is  best  for  the  com- 
munity; that  common  ownership  never  resulted  in  profitable 
cultivation  and  in  modern  times  when  each  acre  must  support 
a  much  greater  population  than  in  the  village  community  stage 
of  industrial  society,  the  improvident  metliods  of  the  olden 
time  would  never  answer.  It  was  not  a  difficult  matter  for  a 
village  community  of  a  few  souls  to  cultivate  its  land  in  com- 
mon and  divide  the  product,  or  to  distribute  holdings  among 
the  heads  of  families.  When  the  community  contains  say  ten 
thousand  souls  and  each  man  is  entitled  to  one  ten  thousandth 
part  of  the  product  or  the  usufruct  of  one  ten  thousandth  part  of 
the  land,  ''selfishness  would  exhaust  itself,"  in  the  scramble 
for  shares  and  no  civil  government  known  to  modern  times 
would  be  equal  to  the  task  of  controlling  the  allotment.  Bet- 
ter the  "evils  of  landlordism,"  which  are  small  compared  with 
the  public  benefits  of  private  ownership. 

Free  Trade  in  Land,  is  increasing  rather  than  diminishing. 
The  world  is  going  away  from  community  of  ownership,  very 
surely.  The  return  to  it  would  mean  an  economic  revolution 
of  almost  inconceivable  magnitude.     One  of  the  problems  in- 


LAND,  LABOR  AND   CAPITAL.  143 

volved  is  the  distribution  among  private  owners.  It  is  usually 
conceded  that  a  distribution  among  a  large  number  of  autono- 
mous producers,  or,  as  it  is  called  in  Europe,  peasant  proprie- 
torship, produces  a  desirable  economy  and  guarantees  the 
permanence  of  civil  institutions.  Will  free  trade  in  land,  such 
as  may  be  expected  within  a  few  generations,  increase  or  di- 
minish the  division  into  separate  holdings?  On  one  hand  it  is 
claimed  that  the  future  organization  of  land  will  involve  the 
control  of  large  areas  by  single  individuals.  The  advocates  of 
communal  ownership  favor  such  control  because  they  see  in  it 
the  germs  of  their  project.  It  is  an  approach  toward  the  cen- 
tralization of  ownership  in  the  state  as  the  final  owner.  On 
the  other  hand  it  is  claimed  that  free  trade  in  land,  the  utmost 
freedom  of  transfer  from  hand  to  hand,  will  result  in  a  multi- 
plication of  division. 

The  Economy  of  Nature. — It  is  said  that  there  are  places 
on  the  earth's  surface,  as  in  some  of  the  Mexican  valleys  for 
instance,  where  one  man's  labor  for  one  or  two  days  each  week, 
will  support  an  average  family.  For  instance,  an  acre  of 
bananas  affords  the  nutriment  of  ten  acres  of  wheat  for  the 
purpose  of  supporting  life.  The  productivness  of  labor  as  con- 
trolled by  physical  environment,  will  beget  varying  relations 
between  the  three  factors.  With  the  Mexican  Indian  who  sup- 
ports his  family  by  working  one  or  two  days  per  week,  the  ele- 
ment of  labor  is  unimportant.  Neither  is  he  required  to  store 
capital  like  the  Dakota  farmer.  There  is  no  impetus  toward 
the  accumulation  of  capital,  however,  since  it  is  not  necessary 
to  store  for  a  time  of  scarcity. 

Allowing  for  Physical  Environment. — Any  statement  of 
the  economy  of  the  modern  nation,  therefore,  which  does  not 
take  into  account  natural  conditions  of  geographical  location, 
of  soil  and  climate,  of  the  character  and  number  of  the  indig- 
enous food  plants,  of  the  resources  of  forest  and  mine,  is  likely 
to  come  out  wrong  in  the  end.  If  the  productivness  of  labor  is 
increased  by  reason  of  the  peculiar  physical  environment,  there 
is  not  only  less  incentive  to  accumulate  capital,  but  capital 
will  take  the  form  of  fixed  and  stated  means,  like  utensils,  of 
acquiring  food  and  clothing  for  immediate  use,  while  under 


144  DESCRIPTIVE  ECONOMICS. 

other  conditions  it  will  consist  of  a  storing  and  accumulation 
of  commodities  for  future  use.  When  the  two  factors  of  land 
and  labor  are  controlling  without  the  intervention  of  capital, 
there  is  a  lack  of  wants.  Wants  do  not  increase  so  as  to  pro- 
duce the  economic  progress  which  always  attends  the  increase 
of  wants.  Population  itself  fails  to  grow.  The  nations  of 
antiquity  rarely  advanced  to  the  industrial  or  national  stage  of 
economics  because,  it  is  said,  the  growth  of  capital  did  not 
keep  pace  with  the  growth  of  the  other  factors. 

Modern  Aggregations  of  Capital. — Historians  tell  of  the 
great  riches  of  the  potentates  of  ancient  nations.  The  lords 
and  barons  of  medieval  Europe  are  referred  to  as  the  possessors 
of  great  estates.  The  riches  of  these,  however,  were  paltry, 
compared  with  the  accumulations  of  some  of  the  modern 
millionaires.  The  capitalists  of  old  were  relatively  rich,  rather 
than  absolutely  rich.  Their  riches  stood  out  with  prominence 
because  of  the  paucity  of  the  accumulations  of  the  great  mass  of 
the  people.  The  modern  capitalists  are  absolutely  rich.  There 
are  so  many  of  them,  however,  and  there  are  so  many  men 
who  are  nearly  as  rich,  so  many  millionaires,  and  so  few,  com- 
paratively, who  are  absolutely  without  any  accumulations 
whatever — that  the  contrast  is  not  striking.  The  evil  con- 
nected with  the  great  accumulation  of  capital  is  not  so  much 
in  the  possession  of  it,  as  in  the  foolish  and  vain  display  of  it. 
It  is  the  shoddy  aristocracy  rather  than  the  real  aristocracy 
that  breeds  discontent. 

The  Organization  of  Capital. — In  the  earlier  economic 
stages,  there  is  so  little  accumulation  of  capital  that  each  man 
has  no  difficulty  in  looking  after  the  investment  and  manage- 
ment of  his  own  estate.  In  the  rural  villages  of  to-day,  for 
instance,  there  are  few  men  who  cannot  directly  supervise  the 
management  of  their  interests.  They  can  invest  in  various 
business  enterprises,  subject  to  their  individual  control,  all  the 
capital  they  possess.  In  the  larger  towns  and  in  the  cities,  the 
number  of  men  possessing  large  capital  increases  so  rapidly, 
and  business  interests  become  so  extensive  and  far-reaching, 
that  one  man's  mind  and  one  man's  capital  are  insufficient. 
This  leads  to  certain  organizations  for  the  better  investment. 


LAND,  LABOR   AND   CAPITAL.  145 

regulation  and  control  of  the  capital  of  many  men.  Further- 
more, the  enterprises  of  the  national  period  are  so  vast  that 
one  man's  capital  is  insufficient  to  conduct  them.  We  must 
consent  to  the  organization  of  capital  or  go  without  railways. 

Corporations — are  illustrations  of  the  organization  of 
capital  contributed  by  many  men  for  a  common  purpose.  A 
few  years  ago  it  was  the  practice  to  create  corporations  from 
time  to  time,  by  special  charter.  A  corporation  was  then  more 
directly  the  creature  of  the  state.  In  recent  times  statutes 
began  to  be  enacted  by  various  states,  authorizing  the  formation 
of  corporations  for  certain  specified  purposes.  A  corporation 
for  the  purpose  of  transacting  a  business  specified  in  one  of 
these  statutes  might  be  formed  without  resort  to  the  legislature, 
but  if  the  business  to  be  transacted  was  not  enumerated,  then 
recourse  was  had  to  the  old  form  of  special  charter.  It  was 
progress,  however,  toward  general  legislation.  We  have  come 
now  to  a  time  when  many  states  have  general  corporation  laws, 
whereby  a  corporation  may  be  formed  to  transact  any  lawful 
business  whatever.  The  generalization  of  legislation  has 
become  complete. 

Corporation  Evils. — The  economic  evils  of  corporate  ag- 
grandizement are,  first  of  all,  the  crowding  out  of  the  small 
capitalist.  The  capital  of  many  men  is  placed  under  the  con- 
trol of  perhaps  two  or  three  master  minds.  The  single-handed 
capitalist  finds  it  difficult  to  survive.  There  is  a  growing 
tendency  to  incorporate  this  and  that  business  enterprise  in 
order  to  transact  a  larger  volume  of  business  and  enlist  outside 
capital  in  favor  of  those  who  actually  attend  to  the  business 
and  draw  the  salaries.  The  result  is  frequent  over-capitaliza- 
tion and  the  formation  of  "bubble"  companies.  The  aggre- 
gation of  capital  is  not  without  its  advantages,  however.  It 
frequently  decreases  the  cost  of  production.  By  means  of  the 
great  sugar  refining  plants  of  modern  times,  sugar  can  be 
refined  at  a  profit  of  one-eighth  of  a  cent  per  pound. 

Trusts    and   Syndicates. — The  trust  is  a  comparatively 

modern  invention.     The  controlling  feature  of  the  trust  is  the 

pooling  of  the  interests  of  a  number  of  firms  or  corporations 

engaged  in  the  same  line  of  business.     The  object  of  the  pool 

10 


146  DESCRIPTIVE  ECONOMICS. 

is  to  control  the  market,  raise  the  price  of  the  commodity 
dealt  in,  and  increase  the  profits  of  the  interested  parties. 
There  are  various  modes  of  forming  the  trust.  The  methods 
may  be  generalized  as  follows  :  Several  corporations,  individ- 
uals or  firms,  engaged,  we  will  say,  in  manufacturing  tobacco, 
desire  to  form  a  trust.  An  inventory  is  taken  and  a  valuation 
placed  upon  each  plant  and  business  to  be  put  into  the  trust. 
According  to  the  simplest  plan  an  agreement  may  then  be 
entered  into  by  all  the  parties  to  the  transaction,  whereby  each 
one  shall  render  an  account  of  the  business  transacted  at  stated 
intervals.  Tlie  aggregate  profits  are  divided  upon  the  basis  of 
the  valuation  which  has  been  placed  upon  each  business.  A 
more  formal  plan  involves  the  choice,  usually  from  the  number 
of  those  who  enter  the  pool,  of  a  certain  number  who  act  as 
trustees  for  the  whole.  The  pooling  agreement  is  made  between 
the  trustees  and  each  member  of  the  pool  individually.  The 
various  businesses  entering  the  pool  may  be  conveyed  to  the 
trustees  absolutely  for  the  benefit  of  all.  The  trustees  have 
power  to  restrict  the  output  of  each  establishment,  and  they 
divide  the  profits.  The  valuation  to  be  employed  as  a  basis  for 
the  division  of  profits  is  agreed  upon  at  the. time  of  the  forma- 
tion of  the  trust  and  the  figures  are  incorporated  in  the  deed 
of  trust.  Very  recently  the  formation  of  trusts  by  means  of 
voluntary  agreements  in  writing  and  through  the  medium  of 
trustees,  has  fallen  into  disuse,  and  the  method  is  employed 
which  is  referred  to  in  a  succeeding  paragraph  on  Statutes 
against  Trusts. 

A  Premium  on  Idle  Plants. — The  trustees  having  power 
to  regulate  the  course  of  manufacture  in  each  establishment, 
may  at  will,  order  any  one  establishment  closed  and  the  plant 
shut  down.  Professor  Ely,  in  Problems  of  To-Day,  says  this 
was  the  result  when  the  elevators  at  Buffalo  were  put  into  a 
trust.  A  number  of  them  were  lying  idle  the  year  round,  but 
the  proprietors  drew  just  as  great  a  proportion  of  the  aggregate 
profits  of  the  whole  number  of  elevators  as  though  their  own 
plants  were  in  operation.  The  result  was  that  elevators 
were  built,  not  with  the  idea  of  being  used,  but  with  the  idea 
of  compelling  the  trust  to  take  them  in  and  give  them  a  portion 


LAND,  LABOR   AND    CAPITAL.  147 

of  the  profits.  The  operation  of  the  tobacco,  sugar  and  cordage 
trusts,  produces  similar  results. 

Freedom  of  Capital. — The  discussion  of  corporations  and 
trusts  briVigs  out  the  fact  that  in  modern  times  great  freedom 
is  accorded  to  capital.  Formerly,  there  were  various  legislative 
restrictions  which  stood  in  the  way  when  a  man  wanted  to  start 
a  business.  The  regulations  of  trade  and  industry  inaugurated 
by  the  medieval  cities  were  continued  into  the  national  period. 
In  the  modern  nation  there  is  scarcely  any  restriction  placed 
upon  industrial  enterprises,  excepting  such  as  the  police  power 
of  the  State  exercises.  By  police  power  is  meant  the  authority 
of  the  State  to  regulate  business  industries  for  the  welfare  and 
health  of  the  people.  It  is  rarely  exercised  for  the  sole  design 
of  regulating  the  use  and  investment  of  capital. 

Statutes  against  Trusts. — The  baneful  effects  of  trusts 
upon  trade  and  commerce  have  resulted  in  the  enactment  by 
Congress  and  by  the  legislatures  of  many  States  of  statutes 
whereby  trust  combinations  are  illegal.  There  are  spasmodic 
attempts  on  the  part  of  public  prosecutors  to  enforce  the  law 
when  its  violation  becomes  flagrantly  public.  To  escape  the 
ban  of  the  law  it  is  common  for  several  firms  or  incorporations 
to  incorporate.  Instead  of  a  secret  trust  there  is  a  pretense  of 
openly  incorporating  under  the  laws  of  a  state  where  general 
corporation  laws  are  favorable.  The  business  to  be  incorpo- 
rated may  be  in  several  states,  but  as  corporations  are  allowed 
to  carry  on  business  outside  of  the  state  where  incorporated, 
this  does  not  stand  in  the  way.  Each  business  entering  into 
the  combination  is  turned  over  to  the  amalgamated  corporation 
something  as  in  case  of  the  trust.  The  several  owners  receive 
capital  stock  of  the  corporation  equal  to  the  agreed  value  of 
their  business.  The  profits  of  the  combination  are  distributed 
in  the  shape  of  dividends  upon  the  capital  stock. 

Monopolies  are  frequently  confounded  with  the  aggrega- 
tions of  capital  represented  by  trusts  and  corporations.  They 
are  radically  distinguished.  A  monopoly  may  be  owned  and 
conducted  by  a  corporation,  and  it  usually  is,  but  corporate 
ownership  does  not  necessarily  cause  a  business  to  be  a  monop- 
oly.    The  purpose  of    trusts    is    to  create  monopolies,   but 


148  DESCRIPTIVE  ECONOMICS. 

monopolies  are  not  always  trusts.  They  are  not  determined  by 
the  extent  of  the  business  or  the  amount  of  capital  engaged. 
Their  popular  connection  with  trusts  and  corporations  arises 
perhaps  from  the  fact  that  they  are  usually  owned  and  con- 
ducted by  corporations. 

Kinds  of  Monopolies. — There  are  two  kinds  of  monopolies 
with  reference  to  their  control  and  ownership  and  they  are  also 
divided  into  two,  classes  with  reference  to  their  inherent 
qualities.  With  reference  to  control,  monopolies  are  public  or 
private.  With  reference  to  inherent  quality  they  are  artificial 
or  natural. 

Public  Monopolies  are  owned  and  managed  by  Govern- 
ment for  the  public  use  and  benefit.  The  postoflBce  is  a 
public  monopoly.  The  government  does  not  allow  private 
parties  to  carry  letters.  The  army  and  navy  are  public  mo- 
nopolies. The  government  reserves  to  itself  the  exclusive  right 
to  maintain  armed  forces.  The  opponents  of  the  Pinkerton 
system  of  armed  guards,  object  to  it  mainly  on  the  ground  that 
it  is  an  infringment  of  the  public  monopoly  of  that  business 
as  owned  and  controlled  by  Government.  Coinage  systems  are 
public  monopolies.  Every  State  reserves  the  right  of  coinage. 
Monopolies  of  these  kinds  are  of  great  public  benefit.  They 
illustrate  the  necessity  of  discrimination.  Men  who  talk  the 
loudest  in  condemnation  of  all  monopolies  are  usually  those 
who  make  the  most  ado  when  the  province  of  a  public  mo- 
nopoly is  usurped  by  private  individuals. 

Private  Monopolies  are  owned  and  controlled  by  private 
individuals  for  private  ends  and  gains.  Private  capital  is  in- 
vested for  the  profit  there  is  in  the  business.  A  great  deal  of 
economic  discussion  relates  to  questions  of  this  character; 
which  industries  shall  be  taken  out  of  private  hands  and  made 
public  monopolies  ?  Ought  the  telegraph,  a  private  monopoly 
in  this  country,  to  be  made  a  public  monopoly  ?  Would  it  be 
for  the  welfare  of  the  people  if  the  government  owned  and 
operated  all  the  railroads  and  kept  private  parties  out  of  the 
business?  Simple  reference  to  these  questions  is  all  that  is 
possible  within  the  limits  of  this  work.  They  are  worthy  of 
additional  thought  and  cxiimiuation. 


LAND,  LABOR  AND   CAPITAL.  149 

Natural  Monopolies. — The  division  of  artificial  monopolies 
is  independent  of  the  previous  division  of  public  and  private 
monopolies.  Private  monopolies  may  be  either  natural  or 
artificial  monopolies.  An  enterprise  which  partakes  of  the 
character  of  a  monopoly  by  reason  of  the  very  nature  of  the 
article  with  which  it  has  to  do,  or  the  manner  in  which  it  is 
controlled,  is  a  natural  monopoly.  Its  own  inherent  character- 
istics causes  it  to  become  a  monopoly.  Common  illustrations  of 
natural  monopolies  are  toll-roads,  canals,  wharves,  ferrys, 
railroads  and  the  water,  gas,  and  electric  light  supplies  of  cities. 
The  very  nature  of  these  enterprises  is  such  that  there  must  be 
a  limit  to  the  number  of  them.  Street  railways  in  cities  are 
strictly  natural  monopolies.  When  one  company  has  secured 
the  franchise  all  others  are  practically  barred  out.  There  is  a 
natural  limitation  to  the  number  of  companies  which  can 
occupy  a  street.  Natural  monopolies  usually  supply  public 
necessaries.  They  are  confined  to  particular  territory.  What 
they  supply  is  subject  to  increase,  without  proportionate  in- 
crease of  cost,  when  the  producing  plant  has  once  been  set  in 
operation. 

Public  Control  of  Monopolies. — The  turning  of  private 
monopolies  into  public  monopolies  is  peculiarly  appropriate 
with  reference  to  natural  monopolies.  Men  who  do  not  go  to 
the  length  of  saying  that  they  should  be  owned  by  govern- 
ment, will  admit  that  they  should  be  subjected  to  greater 
governmental  control  by  the  imposition  of  greater  legal 
restrictions.  Their  frequency  is  one  of  the  arguments  of 
socialism  which  demands  the  absorption  by  the  state  of  all 
natural  monopolies  at  least,  and  the  interposition  of  restric- 
tions upon  their  establishment.  In  many  American  cities  the 
water  works  and  gas  works  are  the  subjects  of  municipal 
ownership  or  control.  Public  benefit  has  resulted  almost  as  a 
rule.  Facts  of  this  character  furnish  grounds  for  public 
ownership  of  all  private,  natural  monopolies.  Land  is  a 
natural  monopoly.  It  is  limited  in  quantity.  There  is  no  way 
of  increasing  the  quantity.  Should  it  be  made  a  public  mo- 
nopoly?    Should  Government  control  its  use  and  distribution? 

Artificial  Monopolies    are    those   created    by  charter  or 


150  DESCRIPTIVE  ECONOMICS. 

legislative  enactment.  They  are  not  monopolies  by  reason  of 
their  inherent  peculiar  qualities.  The  Hudson's  Bay  Company 
was  an  artificial  monopoly.  Its  charter  from  the  Crown  gave 
it  the  exclusive  commerce  in  furs  in  North  America.  The  bank- 
ing business  is  sometimes  a  monopoly.  The  Bank  of  France  is 
a  monopoly.  No  other  bank  can  issue  notes.  The  Bank  of 
England  is  a  partial  monopoly.  It  has  the  monopoly  of  is- 
suing notes  in  London.  In  the  United  States  free  com- 
petition upon  lines  prescribed  by  government  is  the  rule.  The 
colonial  history  of  America  abounds  with  illustrations  of 
artificial  monopolies  granted  by  charters  issuing  from  various 
European  courts  which  had,  or  claimed  to  have,  territorial 
rights  in  the  Western  Hemisphere.  When  a  hue  and  cry  is 
raised  against  monopolies  in  general,  it  is  well  to  remember 
that  there  has  never  been  a  time  in  the  history  of  modern 
nations  when  fewer  artificial  monopolies  existed  than  at 
the  present  day.  In  place  of  the  medieval  restrictions  upon 
industry  the  tendency  is  toward  freedom  of  industry.  The 
growth  of  corporate  franchise  from  the  grant  by  special  charter 
to  the  general  authorization  by  corporation  laws,  illustrates  the 
tendency.  The  medieval  gilds  were  artificial  monopolies. 
They  regulated  commerce  and  manufactures  with  an  iron 
hand.  It  has  taken  centuries  to  leave  behind  the  restrictive 
system  which  they  represented  and  reach  the  modern  freedom 
of  industry. 

Competition  of  Natural  Monopolies. — The  inhabitants 
of  a  city  often  express  longings  for  another  street  railway 
company  in  order  that  there  may  be  competition  in  the  business. 
When  another  company  has  organized  and  entered  the  field, 
competition  seldom  results  in  any  continued  public  benefit. 
Competition  does  not  compete.  The  service  may  be  temporarily 
bettered.  There  is  frequently  a  permanent  improvement  upon 
the  old  order.  It  is  not  by  reason  of  competition,  however, 
because  that  rarely  continues  long.  One  company  is  sure  to 
absorb  the  other  and  there  is  a  natural  monopoly  still.  The 
improvement  is  due  to  the  differentiation  following  the  disuse 
of  the  old  system.  On  the  theory  that  "  competition  is  the 
life  of  trade,"  legislatures  have  passed  laws  forbidding  con- 


LAND,  LABOR   AND    CAPITAL.  151 

solidation  between  railroad  companies,  gas  companies,  and 
telegraph  companies.  Just  as  though  a  statute  could  over- 
come the  inherent  tendency  of  natural  monopolies  to  combine 
and  form  a  greater  monopoly.  There  cannot  be  and  there 
never  will  be  competition  between  them. 

Municipal  Ownership  of  Monopolies. — There  are  many 
advantages  in  municipal  ownership  of  water  works,  gas  works, 
and  electric  lighting  works.  It  is  claimed  that  the  city  should 
own  the  various  industries  which  affect  the  community  at 
large,  and  for  which  its  streets  are  utilized,  just  as  much  as  it 
should  own  and  does  own  the  sewers.  As  a  matter  of  fact  the 
water  works  of  most  cities  are  now  owned  by  the  cities  them- 
selves. Private  ownership  of  public  works  of  that  nature,  is 
out  of  date.  The  tendency  now  is  toward  the  ownership  of 
gas  works  and  electric  lighting  works.  Statistics  show  that 
municipal  ownership  results  in  economy.  In  other  words, 
that  gas  and  electricity  can  be  sold  cheaper  by  the  city  than 
the  prices  charged  by  private  monopolies.  If  the  public  busi- 
ness were  transacted  according  to  the  methods  by  which  in- 
dividuals conduct  a  successful  private  business,  the  last 
argument  against  municipal  ownership  would  fail.  It  cannot 
be  said,  however,  that  public  business  is  thus  transacted.  It 
is  too  frequently  under  the  management  and  control  of  in- 
competent politicians,  prone  to  improvident  methods  which  no 
prudent  business  man  would  introduce  into  his  own  business. 

The  Organization  of  Liahor. — Having  outlined  the  organ- 
ization of  capital,  we  are  prepared  to  trace  the  organization  of 
labor  and  its  relation  to  the  other  factors.  The  organization 
referred  to  is  that  of  the  present  or  national  stage  of  economics. 
The  early  growth  of  these  factors  has  been  set  forth  in  previous 
chapters,  as  "  The  Capital  of  the  Family,"  '*  The  Land  and 
the  Laborer,"  "The  Craftsman,"  and  *'The  Rise  of  Economic 
Classes."  The  highest  organization  of  labor,  hitherto,  was  the 
craft  gild.  The  craft  gild,  however,  was  not  a  labor  organiza- 
tion in  the  modern  sense.  It  embraced  both  employer  and 
employe — both  the  master  and  the  journeyman.  The  modern 
labor  organization  is  for  the  employes,  as  distinguished  from 
the  employers.     It  is  more  expressive,  therefore,  to  speak  of 


153  DESCRIPTIVE  ECONOMICS. 

the  organization  of  the  employes.  It  is  the  organization  of  an 
economic  class,  composed  of  those  without  capital  of  their  own, 
who  serve,  for  fixed  wages,  that  other  class,  the  employers,  who 
have  more  capital  than  they  can  personally  utilize.  The  term 
''laborer,"  used  in  this  connection,  is  misleading,  as  alreadv 
stated,  because  it  gives  rise  to  the  inference,  which  is  false,  that 
the  employe  is  the  only  one  who  labors. 

Labor  in  the  Industrial  Stage. — The  economy  of  the 
modern  nation  in  its  relation  to  labor  has  certain  fixed,  distin- 
guishing characteristics.  One  of  them  is  the  legal  footing  of 
employe  and  employer.  They  may  move  in  different  social 
circles,  but  the  law  recognizes  no  distinctions.  In  the  previous 
economic  stages,  legislation  has  been  so  framed  or  so  construed 
as  to  create  or  tend  to  create  some  legal  inequality.  Another 
characteristic  is  the  freedom  of  movement  accorded  to  the 
employe.  Formerly  he  could  rise  only  by  meeting  and  over- 
coming various  legal  restrictions  relating  to  the  place  of  his 
employment  or  the  nature  of  the  occupation  in  which  he  might 
engage.  In  modern  times,  the  employe  of  to-day  may  be  the 
employer  of  to-morrow.  It  is  a  common  occurrence  for  the 
employer  to  become  the  employe  of  his  former  servant.  The 
ditch  digger  may  become  a  lawyer.  There  is  no  legal  bar  in 
the  way  of  a  man's  entering  upon  any  occupation  for  which  he 
has  the  requisite  ability  and  will.  Under  the  modern  system 
the  eifiploye  has  freedom  of  contract  as  well  as  freedom  of  resi- 
dence. The  condition  is  illustrated  by  comparing  it  with  that 
of  the  slave,  the  first  of  the  laboring  class,  bound  to  his  master; 
that  of  the  serf,  bound  to  the  soil ;  the  condition  of  the  agri- 
cultural laborer  of  the  middle  ages,  little  better  than  that  of 
serfdom,  and  the  condition  of  the  craftsman  in  the  city  stage, 
bound  to  pursue  the  particular  craft  of  his  gild,  in  the  manner 
prescribed  by  the  minute  regulations  of  his  gild  and  in  the 
town  were  his  gild  membership  located  him. 

Efflciency  Grows  with  Freedom. — Following  the  pro- 
gression of  labor,  from  slavery  to  freedom,  it  is  easy  to 
see  how  much  more  efficient  labor  has  become,  with  each 
advancing  step.  The  man  who  is  his  own  master  feels 
th^it  he  is  working  for  himself  and  not  in  the  service  of  others. 


LAND,  LABOR   AND    CAPITAL.  153 

The  thought  ennobles  the  work.  He  knows  that  if  he  is  dissat- 
isfied with  one  service  he  is  free  to  enter  another.  If  there  is 
an  overplus  of  labor  in  one  locality,  he  is  free  to  go  to  another. 
When  one  occupation  becomes  distasteful,  he  is  free  to  choose 
and  follow  another.  This  state  of  affairs  dates  only  a  little 
back  of  the  French  Revolution.  One  does  not  realize  the  eco- 
nomic progress  in  relation  to  labor  until  it  is  seen  what  the 
condition  of  labor  very  recently  was. 

The  Labor  Question. — Notwithstanding  the  modern,  amel- 
iorated condition  of  labor,  arising  from  the  freedom  of  move- 
ment, the  legal  equality  and  the  increased  efficiency  of  labor, 
there  is  a  "  labor  question."  Like  the  poor,  it  is  always  with 
us.  Legal  equality  does  not  seem  to  bring  economic  equality. 
It  is  true,  as  Professor  Brentano  says,  that  "  the  course  of 
ideas  since  the  eighteenth  century  has  recognized  the  equal 
right  of  all  social  classes  to  a  participation  in  civilization  and 
its  progress,"  but  the  employes  complain  that  they  do  not  par- 
ticipate equally  with  the  employers.  Of  what  good  is  the  in- 
creased efficiency  of  our  labor,  they  say,  if  we  are  kept  from 
sharing  in  the  increased  results  ? 

Lasalle's  Iron  Law  of  Wages. — Ferdinand  Lasalle  was 
the  leader  of  the  Social  Democrats  of  Germany  from  1862 
until  his  death  in  a  duel  in  1864.  As  a  social  agitator  he 
schemed  to  better  the  condition  of  the  working  classes.  There 
was  then  a  school  of  English  economists  whose  doctrine  con- 
cerning the  wages  of  labor  was  widely  propagated.  This  doc- 
trine taught  that  there  was  a  natural  and  necessary  rate  of  dis- 
tribution of  the  product  of  labor  and  capital  between  the 
employer  and  the  employe.  In  other  words,  it  was  maintained 
that  there  is  a  natural  rate  of  wages  which  the  employer  can- 
not lower  and  the  employe  cannot  raise.  Following  the  En- 
glish doctrine,  Lasalle  stated  the  rule  determining  the  rate  of 
wages  in  this  way  :  "  The  limitation  of  the  average  wages  of 
labor  to  the  necessaries  of  life  requisite  among  a  people,  accord- 
ing to  custom,  for  the  prolongation  of  the  existence  of  the 
individual  and  for  the  perpetuation  of  the  species — this  is  the 
iron  and  cruel  law  which  controls  the  wages  of  labor  under  the 
relations  of  to-day."    The  very  force  which  Lasalle  threw  into 


154  DESCRIPTIVE  ECONOMICS. 

the  statement  attracted  attention,  and  his  name  came  to  be 
associated  with  the  so-called  law,  although  it  did  not  originate 
with  him.  His  use  of  the  word  *'iron,"  furnished  a  con- 
venient descriptive  phrase. 

The  "  Wage  Fund  "  Theory,  is  an  outgrowth  of  Lasalle's 
"Iron  Law."  It  also  involves  a  natural  rate  of  wages.  It 
assumes  that  there  is  a  certain  amount  of  money  in  every  coun- 
try which  is  available  for  the  payment  of  labor.  This  amount 
is  the  "wage  fund"  of  the  country.  Its  size  is  determined 
by  the  amount  of  capital  in  circulation.  As  it  is  to  be  divided 
among  all  the  employes  in  the  country,  the  rate  of  distribution 
or  the  wages  each  will  receive,  depends  upon  their  number. 
They  cannot  increase  the  fund,  and  the  only  way  to  increase 
the  distribution  or  raise  wages  is  by  limiting  the  number  of 
those  dependent  upon  the  division.  The  theories  of  the  wage 
fund  and  Lasalle's  law  are  not  stated  here  as  representing  eco- 
nomic facts.  As  theories,  they  belong  to  the  theoretical  domain 
of  economics,  and  it  has  been  said  that  Descriptive  Economics 
has  very  little  to  do  with  that  domain.  They  are  stated,  how- 
ever, to  show  what  economists  have  thought  and  what  the 
sequence  of  thought  has  been.  Even  exploded  theories  have  a 
place  in  economic  history. 

The  Growth  of  Organization. — The  organization  of  the 
employes  has  grown  to  meet  the  growth  of  the  organization  of 
capital.  When  the  time  comes  that  a  gigantic  trust,  like  the 
Sugar  Trust,  for  instance,  brings  the  entire  nation  within  the 
circle  of  its  operations,  the  employes  conclude  that  they  must 
expand  their  organization  accordingly.  Modern  labor  organi- 
zation, therefore,  amalgamates  local  coalitions  into  district 
associations.  Districts  finally  cover  states,  and  state  organiza- 
tions have  expanded  into  national  organizations.  The  Knights 
of  Labor  have  their  stated  National  Assemblies.  The  Trades 
Unions  are  represented  by  the  American  Federation  of  Labor, 
which  is  an  affiliated  body,  composed  of  the  International,  Na- 
tional and  local  Trade  Unions,  the  Federal  Labor  Unions, 
State  Federations,  Central  Labor  Unions  and  Trades  Assem- 
blies of  towns  and  cities.  The  parts  of  the  Federation  are 
not  as  closely  united  as  with  the  Knights.     Great  combina- 


LAND,  LABOR  AND    CAPITAL.  165 

tions  of  capital,  employing  a  vast  number  of  workmen,  have 
tended  to  systemize  the  growth  of  labor  organizations,  and 
have  also  increased,  or  at  least  preserved,  the  coalition  of  the 
employes.  Certain  advantages  of  the  organization  of  the  sepa- 
rate crafts  into  unions  or  assemblies  have  been  discovered. 
This  form  of  organization  is  fast  prevailing.  The  Knights  of 
Labor  have  come  to  recognize  it  to  a  certain  extent.  The 
employes  of  large  concerns  frequently  have  an  organization  of 
their  own  number,  affiliated  to  the  Kniglits  of  Labor  or  the 
Federation  of  Labor.  An  organization  or  union  of  that  char- 
acter frequently  accomplishes  the  most.  The  employes  can 
unitedly  communicate  with  the  employer,  and  he  is  most  likely 
to  meet  them  half  way  because  they  represent  his  own  employes, 
and  outsiders  do  not  appear  to  be  dictating  to  him  regarding 
the  conduct  of  his  business. 

Coalitions  of  Employers  began  with  the  early  organiza- 
tion of  Trades  Unions  in  England.  At  first  they  were  designed 
to  meet  some  local  and  momentary  emergency — to  oppose  a 
local  strike.  When  the  Unions  became  permanently  and  per- 
fectly organized  associations,  the  employers'  associations  be- 
came more  of  a  fixed  institution.  In  the  United  States  several 
industries  have  state  organizations  of  the  employers,  and  city 
organizations  are  very  common.  Among  the  well  organized 
industries  are  the  builders  and  the  publishers.  The  object  is 
mutual  support  in  strikes,  the  regulation  of  wages,  and  the 
indemnification  of  members  against  loss  from  strikes.  The 
employers'  Trades  Unions  retaliate  for  strikes  by  inaugurating 
lock-outs,  and  so  the  feud  goes  on. 

The  Division  of  the  Product. — The  distribution  between 
the  employer  and  the  employe  of  the  product  of  the  joint 
application  of  labor  and  capital,  is  the  foundation  of  "the 
labor  question."  "Of  the  net  product  of  the  joint  application 
of  labor  and  capital,  what  proportion  shall  fall  to  labor  and 
what  to  capital  ? "  The  question  had  its  origin  back  in  the 
stage  of  the  municipal  economy.  When  we  left  the  craftsmen 
and  their  gilds  they  had  succeeded  in  their  struggle  with  the 
burghers  or  landholding  citizen  class,  and  had  acquired  equal 
municipal  and  industrial   rights.     About  the  time  they  ac- 


156  DESCRIPTIVE  ECONOMICS. 

quired  such  rights,  a  '^progressive  degeneration"  commenced. 
The  journeymen  and  the  masters  ceased  to  work  side  by  side 
upon  terms  of  equality.  Capital  assumed  a  new  importance  in 
industry  and  the  masters  began  to  form  a  class  by  themselves 
apart  from  the  journeymen.  There  was  speedily  developed  an 
employer  class  composed  of  the  masters,  and  an  employe  class 
composed  of  the  journeymen.  According  to  some  accounts 
the  employer  class  was  fully  as  arrogant  and  grasping  as  any 
employer  class  known  since.  The  quarrel  about  the  division 
of  the  product  between  employer  and  employe  commenced 
then,  and  it  has  been  waged  ever  since.  This  industrial  age  is 
full  of  the  strife. 

The  Quarrel  Illustrated. — Suppose  the  case  of  an  employer, 
a  man  who  has  more  capital  than  he  can  profitably  utilize  by 
his  own  labor,  who  embarks  in  a  manufacturing  enterprise. 
He  requires  a  certain  number  of  employes.  If  he  is  successful, 
the  industry  will  yield  some  profitable  returns.  How  shall  the 
returns  be  divided  between  the  employer  and  his  employes  ? 
That  is  the  question.  The  division  is  usually  made  in  this 
way.  After  paying  for  his  rent  and  allowing  for  interest  on 
the  capital  invested,  and  after  paying  the  wages  of  the  em- 
ployes, the  balance  is  the  employer's  share  or  the  profits  of  the 
business.  But  this  division  does  not  indicate  the  share  of  the 
employe  in  wages.  The  employe  claims  that  he  has  been  com- 
pelled to  receive  the  lowest  possible  amount  which  will  prolong 
life  according  to  "the  standard  of  living."  As  Lasalle  put  it : 
**From  the  proceeds  of  production  so  much  is  taken  and  dis- 
tributed among  laborers  in  the  form  of  wages  as  is  requisite 
for  the  perpetuation  of  life.  The  entire  surplus  of  production 
— the  proceeds  of  labor — falls  to  the  employer,"  and  the  human 
condition  of  the  laborer  is  ''always  to  dance  round  under  the 
lowest  rim  of  the  necessaries  of  life,  customarily  requisite  in 
every  age,  to  stand  now  a  little  above  this,  now  a  little  below 
it." 

The  Employe's  Share. — The  employe  claims  that  by  rights 
he  should  receive  something  more  than  customary  wages — 
something  more  than  will  provide  the  bare  necessities  of  life 
and  prolong  existence  according  to  custom  or  the  standard  of 


LAND,  LABOR   AND    CAPITAL.  157 

living.  In  substance  the  claim  of  tlie  employe  is  this  :  The 
employer  should  be  allowed  his  rent,  interest  on  the  capital 
which  he  has  invested,  and  as  his  profits  a  fair  share  of  the 
balance  for  the  risk  of  the  business  and  his  management  and 
supervision.  The  rest  should  fall  to  the  lot  of  the  employe. 
This,  in  substance,  is  the  subject  of  the  quarrel  between  capital 
and  labor.  It  is  usually  and  popularly  referred  to  as  a  question 
of  wages,  but  to  prove  that  the  real  question  concerns  the 
division  of  the  profits,  you  have  but  to  notice  that  in  nine 
cases  out  of  ten  when  a  body  of  employes  demands  an  increase 
of  wages,  the  demand  is  backed  up  by  a  showing  of  the  em- 
ployer's profits.  On  the  other  hand,  the  employer  invariably 
fortifies  himself  by  showing  that  the  profits  of  the  business  are 
not  suflBcient  to  warrant  an  increase  of  wages. 

The  Organization  of  the  Employes. — Following  close 
upon  the  degeneration  of  the  gild  system  and  tlie  rise  of  the 
employer  class  composed  of  the  master  workmen,  and  the  em- 
ploye class  composed  of  the  journeymen,  coalitions  among 
employes  became  frequent.  This  was  toward  the  close  of  the 
eighteenth  century.  Customary  industrial  regulations  which 
had  hitherto  prevailed,  and  especially  during  the  sway  of  the 
gild  system,  began  to  fall  into  disuse.  The  main  object  of  the 
coalitions  was  to  preserve  the  old  rights  in  a  legal  way.  The 
associations  of  the  employes  endeavored  to  obtain  legal  redress 
by  petitioning  parliament.  A  secondary  object  was  to  support 
fellow  workmen  during  the  many  strikes  of  the  period.  The 
employers  began  to  take  steps  to  combat  the  coalitions  of  the 
employes  and  succeeded  in  getting  parliament  to  enact  a  law 
against  them.  This  solidified  the  employes  and  the  result 
of  the  agitation  was  the  organization  of  the  English  Trades 
Unions. 

Development  of  the  Unions. — At  first  the  associations  of 
the  employes  were  ephemeral.  The  employes  united  for  a 
temporary  purpose  and  with  the  object  of  securing  some  specific 
local  amelioration.  As  soon  as  they  had  accomplished  their  ends, 
the  coalition  ceased,  only  to  be  formed  again  when  there  was 
further  use  for  them.  By  and  by  they  became  permanent 
organizations.     They  were  merely  local  societies,  including,  at 


158  DESCRIPTIVE  ECONOMICS. 

first,  all  employes  of  an  industry  in  a  particular  locality.  The 
early  organization  was  imperfect.  Strikes  were  frequent  and 
rarely  successful.  Gradually  the  unions  began  to  be  extended 
so  as  to  include  several  places.  The  members-of  a  union  upon 
going  to  another  place  would  establish  a  branch  union  there, 
until  all  the  places  of  the  country  in  which  the  respective 
industry  was  carried  on,  came  within  the  pale  of  the  organiza- 
tion, and  there  were  very  few  industries  in  England  which 
were  not  organized. 

The  Object  of  the  Unions. — The  English  Trades  Unions 
sought  to  maintain  the  interests  of  the  various  industries  as  a 
whole,  and  to  care  for  the  individual  interests  of  the  members. 
In  this  they  resembled  the  old  gilds,  whose  chief  purpose  was 
the  preservation  of  the  interests  of  each  craft,  and  to  care  for 
the  private  interests  of  the  separate  craftsmen.  They  were  a 
natural  outgrowth  of  the  gild  system  by  which  each  craft  was 
organized  into  its  own  gild. 

Trades  Unions  in  the  United  States. — When  the  idea  of 
the  organization  of  each  industry  by  itself  was  transplanted  in 
the  United  States,  the  purposes  were  enlarged.  The  purpose 
of  the  union  included  not  only  a  care  for  the  welfare  of  the 
whole  industry  and  of  the  individual  needs  of  each  member, 
but  there  was  a  special  aim  to  increase  the  rate  of  wages.  Thi-s 
was  sought  to  be  gained,  either  by  securing  a  raise  in  the  wages, 
or  by  limiting  the  number  of  employes  through  the  restriction 
of  apprenticeship.  The  American  Trades  Unions,  moreover, 
introduced  some  social  features  into  their  organization.  It 
was  sought  to  elevate  the  employe  class  socially  and  intellectu- 
ally.    Eegulations  respecting  self-help  were  introduced. 

The  Knights  of  Labor. — This  is  a  modern  organization  as 
compared  with  the  Trades  Union^  It  differs  radically  from 
the  Trades  Union  in  that  it  does  not  insist  upon  each  craft 
being  organized  by  itself.  It  admits  to  membership  all  who 
come  within  its  definition  of  workingmen.  The  Trades  Unions 
have  been  conservative  as  to  old  traditions,  and  have  proceeded 
as  though  there  were  an  inevitable  fight  between  employer  and 
employes  with  no  prospect  of  peace.  The  theory  upon  which 
the  Knights  of  Labor  is  based  recognizes  a  joint  interest  of 


LAND,  LABOR  AND    CAPITAL.  159 

capital  and  labor,  with  the  hope  of  greater  amelioration  of  the 
workingman's  lot  by  the  means  of  closer  industrial  union 
between  the  two  forces. 

Advantages  of  Organization. — An  enumeration  of  the 
advantages  of  the  organization  of  the  employes,  would  be  based 
on  what  it  may  do  when  properly  directed,  rather  than  on  what 
it  has  done.  Organization  has  often  failed,  and  on  the  other 
hand,  it  has  frequently  produced  the  following  results: 

(1)  On  the  theory  that  the  employe  has  a  commodity — la- 
bor— to  sell,  organization  may  enable  him  to  make  the  sale  on 
the  same  basis  as  other  wares  are  sold. 

(2)  It  may  place  him  in  as  good  a  position  to  sell,  because  it 
enables  him  by  mutual  contributions  to  withhold  his  commo- 
dity from  the  market  when  there  is  no  demand. 

(3)  Because  it  may  enable  him  to  regulate  the  supply  of  la- 
bor, by  distributing  the  employes,  and  assisting  them  in  pro- 
curing employment.  •  The  difficulty  of  procuring  stated 
employment,  increases  with  each  succeeding  economic  stage, 
and  organization  must  provide  for  the  difficulty. 

(4)  It  may  raise  wages  by  united  demand,  when  the  demand 
of  a  single  individual  would  go  unheeded. 

(5)  It  may  enable  the  employe  to  make  a  better  contract 
with  the  employer  than  could  be  done  single  handed.  The 
contract  ceases  to  be  individual  and  becomes  collective. 

(6)  It  may  shorten  the  hours  of  labor. 

(7)  It  may  secure  legislation  in  favor  of  the  employe  and  in 
protection  of  his  equal  rights  to  "participate  in  the  advantages 
of  civilization."  The  Factory  laws  are  instances  of  legislation 
procured  through  labor  organizations. 

(8)  Organizations  may  act  as  relief  societies,  or  as  insurance 
associations,  and  distribute  funds  collected  from  the  healthy, 
among  the  indigent  and  sick. 

(9)  Not  least,  united  association  can  attract  attention.  It 
will  be  heard.  It  will  bring  the  condition  of  the  unfortunate 
— those  who  are  born  with  lesser  intellectual  capacities  per- 
haps, or  still  worse,  have  been  burdened  with  vicious  parent- 
age— to  the  notice  of  the  more  fortunate,  and  it  will  keep  the 
attention  in  its  direction. 


160  DESCRIPTIVE  EC0N03IICS. 

Evils  of  Orgrauization. — The  sense  of  might  aroused  by 
combination  may  sometimes  lead  to  unwise  and  imprudent 
demands.  Such  demands  would  doubtless  be  more  frequent 
were  it  not  for  the  influence  of  public  opinion,  which  quickly 
perceives  when  the  demands  of  the  labor  organizations  are  just, 
and  when  they  are  unjust.  An  impolitic  course  is  perhaps 
due  more  to  the  influence  of  unwise  leadership,  than  to  the 
desires  of  the  rank  and  file,  so  that  a  fundamental  evil  lies  in 
the  danger  of  bad  leadership,  and  it  is  often  said  that  the 
greatest  foe  to  the  organization  of  labor,  is  the  professional 
agitator,  who  imbues  bis  comrades  with  a  spirit  of  unrest,  and 
abuses  his  authority  by  inciting  strikes  and  boycotts  which  are 
not  wanted  by  the  great  mass  of  employes.  This  evil  can  be 
readily  studied  in  the  United  States  by  tracing  the  history  of 
some  of  the  craft  organizations  whose  councils  have  been  di- 
rected by  prudent  and  conservative  men,  and  comparing  that 
history  with  the  history  of  organizations  which  have  fallen  into 
the  clutch  of  the  professional  agitator.  Organizations  some- 
times handicap  the  individual  members  by  imposing  restrictions 
upon  the  conduct  of  industry,  relating  to  wages,  hours  of  work 
and  the  manner  of  working.  The  organization  then  reflects 
the  vices  which  preceded  the  degeneration  of  the  medieval  gild 
system.  The  oppression  of  the  workmen  by  the  master  under 
the  gild  system  has  been  thus  described  by  Yves  Guyot:  "Each 
gild  formed  a  little  feudal  state,  ruled  by  masters,  who  aimed 
and  aimed  successfully  at  making  themselves  an  hereditary 
caste,  and  enforcing  on  every  one  not  of  their  own  order  a  host 
of  almost  impossible  conditions  as  the  price  of  entering  it. 
Each  master  became  a  petty  baron,  to  whom  the  workman  was 
no  better  than  a  serf.  Under  the  pretext  of  protection,  the 
master  exercised  the  most  absolute  despotism  over  the  appren- 
tices and  journeymen.  The  unfortunate  who  aspired  to  the 
freedom  of  his  craft,  had  first  to  serve  a  long  apprenticeship  to 
one  master.  The  masters  made  the  rules  and  in  every  gild  they 
squeezed  the  very  last  farthing  of  profit  out  of  the  young  work- 
man. *  *  *  Handed  over  powerless  to  his  master,  subject  to  all 
his  requirements  and  all  his  caprices,  the  apprentice  had  no 
appeal.     If  driven  by  want  and  ill  usage  he  ran  away,  no  one 


LAND,  LABOR  AND    CAPITAL.  161 

might  offer  him  an  asylum.  Like  a  serf  he  could  be  treated  as 
an  article  of  commerce,  and  sold  by  one  master  to  another." 

The  Union  of  Labor  and  Capital. — It  is  often  said  that 
the  interesls  of  capital  and  labor  are  identical.  The  interests 
of  two  hungry  lions  dining  on  a  kid  are  identical.  It  is  to  the 
interest  of  each  to  get  as  large  a  mouthful  as  possible.  There 
was  a  time  when  capital  and  labor  were  united.  In  the  family 
stage  of  economics,  each  person  was  a  joint  owner  in  all  the 
capital  of  the  family  and  performed  a  share  of  all  the  family 
labor.  There  was  a  similar  union  in  the  village  stage,  although 
capital  began  to  be  felt.  The  laborers,  those  who  served 
others,  were  mainly  slaves  or  serfs,  and  there  could  be  no  di- 
vision of  interests.  In  the  city  stage  capital  began  to  assume 
a  new  importance.  The  master  craftsmen  were  those  who  had 
acquired  sufficient  capital  to  buy  the  raw  materials  and  manu- 
facture for  the  general  market  and  for  a  future  demand.  Then 
they  became  the  employer  of  the  journeyman  without  capital, 
and  the  interests  of  the  two  classes  began  to  part.  In  this 
national  stage,  the  importance  of  capital  as  compared  with 
labor  has  become  more  marked.  A  very  little  capital,  com- 
pared with  modern  standards,  would  enable  the  medieval  crafts- 
men to  become  a  master  and  set  up  for  himself.  In  our  times 
the  possessor  of  a  little  capital  has  no  chance  in  competition 
with  great  corporations  and  the  modern  modes  of  capitalistic 
production.  In  the  language  of  Professor  Ely:  "As  a  sepa- 
rate, distinct  and  mighty  force,  capital  as  it  exists  to-day,  is 
something  new."  Its  interests  can  never  be  identical  with 
those  of  labor  under  the  present  order.  The  employer  will 
ever  strive  to  appropriate  as  large  a  share  of  the  joint  product 
as  possible,  and  the  employe  must  ever  strive  to  get  his  share. 

Schemes  for  Lessening  the  Strife. — Many  plans  have  been 
suggested  or  tried  for  uniting  labor  and  capital.  Some  are 
visionary  and  some  have  worked  practical  results.  Many  of 
the  projects  aim  to  make  the  employe  a  capitalist.  Some  seek 
to  introduce  stated  rules  for  the  government  of  the  relations 
between  the  employer  and  the  employe. 

(1.)  Labor  Legislation.— Ho  the  latter  class  belong  the  so- 
called  labor  laws.  The  State  steps  in  by  means  of  legislation 
11 


162  DESCRIPTIVE  ECONOMICS. 

and  seeks  to  regulate  employment  and  control  the  relations  of 
the  employer  and  employe.  Labor  legislation,  as  such,  began 
in  Queen  Elizabeth's  time  by  the  enactment  of  the  Law  of 
Apprentices.  The  gild  system  under  which  the  industrial 
system  of  all  Europe  had  been  organized  was  undergoing  a 
process  of  disintegration,  and  the  labor  question  was  becoming 
troublesome  by  reason  of  the  rise  of  an  employer  class  as  dis- 
tinguished from  the  employe  class.  The  Law  of  Apprentices 
sought  to  codify  and  continue  the  regulations  of  the  gild 
system.  This  legislation  was  followed  up  by  the  factory  legis- 
lation which  began  at  the  opening  of  the  present  century. 
Arkwright's  newly  invented  loom  was  revolutionizing  the  tex- 
tile industry.  Spinning  in  cottages  and  homes  fell  into  disuse 
and  the  spinners  began  to  be  massed  in  large  factories  under 
the  direct  supervision  of  employers.  The  first  factory  law  was 
designed  to  meet  the  resulting  evils.  Additional  laws  were 
framed  from  time  to  time  looking  to  the  regulation  of  the 
factory  system  connected  with  each  industry.  Finally  a  gen- 
eral law  is  enacted  applicable  to  all  large  manufacturing 
establishments,  and  the  special  acts  relating  to  particular  in- 
dustries, are  repealed.  Legislation  becomes  general  instead  of 
special.  This  process  is  illustrated  in  the  growth  of  the 
factory  legislation  of  many  States  of  the  union.  The  principle 
is  still  at  work,  and  we  must  study  its  past  workings  and 
observe  its  future  developments. 

2.  Courts  of  Arbitration. — This  plan  for  settling  the  dif- 
ferences between  employer  and  employe  was  first  put  into  definite 
shape  in  Nottingham  at  about  the  time  of  the  close  of  our  civil 
war.  A  stocking  manufacturer,  named  Mundella,  was  instru- 
mental in  introducing  the  system  for  the  settlement  of  differ- 
ences between  employers  and  employes  engaged  in  the  stocking 
weaving  and  glove  industry.  The  main  feature  of  the  plan 
was  the  institution  of  courts  of  arbitration  consisting  of  nine 
employes  chosen  by  the  trades  unions  of  the  employes  and  nine 
employers  chosen  by  a  general  assembly  of  the  employers.  All 
disputes  must  first  be  brought  before  a  committee  of  reconcilia- 
tion, consisting  of  four  members  of  the  court.  If  the  commit- 
tee could  not  make  adjustment    then  the  matter  came  before 


LAND,  LABOR  AND    CAPITAL.  163 

the  whole  court  for  final  decision.  The  system  rested  wholly 
upon  the  voluntary  consent  and  agreement  of  the  parties. 
Shortly  after  Mundella's  "  Rules  of  the  Courts  of  Arbitration 
in  the  Stocking  Weaving  and  Glove  Industry  of  Nottingham  " 
were  formulated,  another  system  was  set  up  at  Wolverhampton 
by  Rupert  Kettle,  and  developed  into  what  is  known  as  Kettle's 
Courts  of  Arbitration.  They  differed  from  Mundella's  in  that 
provision  was  made  for  the  enforcement  of  the  decision  of  the 
court.  The  agreement  which  the  parties  formed  raised  a  legal 
obligation  to  obey  the  decision  of  the  arbitrators  and  the  court 
might  in  this  way  enforce  execution  of  its  sentences. 

In  the  United  States  the  various  legislative  enactments 
instituting  boards  of  arbitration  and  mediation  have  been 
founded  upon  the  English  system  of  arbitration  by  agreement. 
The  statutes  impose  in  the  courts  compulsory  power  of  investiga- 
tion, without  authority  to  execute  sentences.  The  success  of 
arbitration  through  legislation  has  been  but  little,  if  any, 
greater  than  that  by  agreement  instituted  by  Mundella  and 
Kettle. 

Three  steps  may  be  traced  then  in  the  development  of 
arbitration  between  employe  and  employer. 

(a.)  Submission  to  arbitration  by  voluntary  agreement  with- 
out power  to  enforce  decision. 

(b. )  Submission  to  arbitration  by  voluntary  agreement,  with 
a  legal  obligation  to  abide  by  the  decision  of  the  court  of 
arbitration. 

(c.)  Enforced  arbitration  or  more  properly  investigation  by 
courts  or  boards  of  arbitration  instituted  by  statute,  without 
power  to  enforce  decision. 

The  fourth  step  is  being  agitated.  It  is  compulsory  arbitra- 
tion by  legislation  instituting  boards  or  courts  of  arbitration, 
with  power  to  compel  either  side  to  submit  to  investigation  and 
to  abide  by  the  decision. 

3.  Profit  Sharing  between  employer  and  employe  is  a  third 
plan  for  lessing  the  strife.  It  has  been  tried  both  in  Europe 
and  the  United  States.  It  has  sometimes  worked  marvelously 
well,  and  forthwith  has  been  declared  to  be  the  panacea  for  the 
social-economic  malady  which  we  are  now  discussing.     On  the 


164  DESCRIPTIVE  ECONOMICS. 

other  hand,  it  has  sometimes  failed,  and  failed  dismally.  In 
its  more  general  form,  the  employe  receives  fixed  wages  and 
in  addition  a  portion  of  the  net  profits  of  the  business,  dis- 
tributed in  proportion  to  the  employe's  salary.  In  other  words, 
after  paying  his  employes  the  wages  agreed  upon,  and  after 
deducting  rent  and  interest  on  the  capital  invested,  the 
employer  is  willing  to  distribute  a  part  of  the  residue  or  profits 
among  the  employes.  The  joint  industry  is  supposed  to  be 
bettered  by  the  increased  interest  which  the  employe  takes  in 
the  business.  Machinery  is  better  handled,  and  more  carefully 
used,  and  duties  are  performed  more  faithfully.  In  some 
cases  the  profit  sharing  is  effected  by  means  of  the  joint  stock 
company,  the  employes  holding  shares  in  the  capital  stock,  and 
to  that  extent  becoming  capitalists,  and  in  either  case  the 
employes  are  supposed  to  be  directly  interested  in  the  results  of 
their  own  labor,  and  therefore  will  make  that  labor  as  efficient 
as  possible. 

4.  Co-operation.  —  Co-operation  among  employes  has  fre- 
quently been  advanced  as  the  scheme  which  would  work  in- 
dustrial transformation  and  solve  the  labor  question.  Co- 
operation is  either  compulsory  or  voluntary.  The  joint  stock 
company  referred  to  in  the  preceding  paragraph,  is  an  instance 
of  co-operation.  The  employes  combine  their  capital  and 
manage  the  joint  industry  in  their  own  way,  sharing  the  profit 
and  loss  accordmg  to  the  amount  of  capital  which  each  has 
invested.  In  England  and  France,  co-operation  has  been  at 
times  extremely  successful.  The  system  there  frequently  takes 
the  form  of  co-operative  societies  for  the  purchase  and  dis- 
tribution among  the  employes  of  the  various  wants  of  life. 
The  co-operative  store  is  a  familiar  example. 

5.  Piece  Work  does  much  toward  avoiding  disputes  between 
employer  and  employe.  It  is  an  expression  of  free  labor.  The 
employe  feels  himself  free.  The  employer  furnishes  him  raw 
materials,  tools  and  motive  power,  and  the  employe  is  at  liberty 
to  deliver  the  results  of  his  work  whenever  he  may  choose. 
**  Piece  work  maintains  the  distinction  between  the  man  and 
the  thing  ;  the  human  individual  and  the  utility  he  produces. 
It  specifies  the  function  of  the  human  who  owes  a  fixed  service 


LAND,  LABOR  AND    CAPITAL.  165 

in  return  for  a  fixed  price.  Piece  work  is  one  of  the  progressive 
forms  of  organization  of  labor.  In  large  undertakings  it  begins 
to  be  the  substitute  for  other  modes  of  labor  wherever  it  can  be 
applied." 

6.  TTie  Scale  System. — This  is  practically  the  payment  of  the 
employes  according  to  the  profits.  It  is  best  known  by  its 
application  in  the  payment  of  the  employes  engaged  in  the  iron 
industry  in  the'United  States.  From  the  fact  that  it  originated 
with  the  Amalgamated  Association  of  Iron  Workers,  its  best 
known  form  is  the  '*  amalgamated  scale."  As  applied  in  the 
iron  industry,  the  employes  are  paid  according  to  the  selling 
price  of  iron.  This  would  work  injustice,  however,  to  manu- 
facturers in  districts  less  conveniently  located  with  reference  to 
transportation  than  others,  because  while  the  selling  price  of 
iron  is  fixed  for  the  whole  country,  one  manufacturer  must 
sometimes  pay  more  for  transportation  than  another,  and 
therefore  make  less  profit.  To  meet  this  objection  the  iron 
producing  territory  is  divided  into  districts,  with  reference  to 
distance  from,  and  cost  of  transportation  to,  tide  water,  for 
instance,  and  d,  uniform  scale  is  agreed  upon  between  the  em- 
ployers and  employes  of  each  district.  The  scale  of  the  several 
districts  is  modulated  to  meet  the  several  differences  in  cost 
of  putting  the  iron  on  the  market.  In  practice,  the  employers 
at  different  points  are  thus  placed  on  an  equal  footing.  The 
scale  is  fixed  by  agreement,  at  stated  intervals,  upon  the  basis 
of  an  assumed  price  of  iron.  If  iron  rises  during  the  interval, 
the  employes  receive  a  proportionate  advance  in  wages.  If 
iron  falls,  they  must  submit  to  a  proportionate  reduction  in 
wages.  If  each  side  would  invariably  present  and  accept  a  fair 
scale,  the  system  must  certainly  be  advantageous.  When  the 
stated  intervals  for  "  signing  the  scale  "  come  around,  however, 
there  is  frequently  haggling  about  the  ratio,  resulting  in  an 
uncertainty  injurious  to  both  the  employers  and  employes. 
Business  is  at  a  standstill,  until  the  scale  is  signed.  This 
system,  like  all  others  of  its  nature,  involves,  first  of  all,  a 
question  of  education  and  ethics.  The  employer  must  be 
ready  to  accept  a  division  that  is  fair,  and  the  employe  must 
understand  when  a  fair  division  is  offered,  and  not  demand  one 
that  is  unfair. 


166  DESCRIPTIVE  ECONOMICS. 

Socialism  and  Coimuunism,  are  intimately  connected 
with  the  subjects  which  have  just  been  discussed.  The  advo- 
cates of  socialism  desire  the  perfect  union  of  capital  and  labor, 
or  in  other  words  they  seek  the  complete  industrial  union  of 
the  three  factors,  land,  labor,  capital.  The  English  language 
is  the  usage  of  the  best  writers.  So  it  may  be  said  that  the 
true  theories  of  socialism  are  those  proposed  by  the  leaders  of 
socialistic  thought.  If  socialism  were  what  every  agitator 
proclaims  it  to  be,  systematic  study  of  it  would  be  wholly  un- 
profitable. There  have  been  various  schools  of  socialistic 
thinkers,  at  various  times,  in  various  parts  of  the  world.  Their 
theories  and  plans  have  differed  in  respect  to  details,  >but  there 
is  a  connecting  thread  through  the  whole.  It  will  suffice  our 
present  purposes  to  follow  that  thread.  It  will  not  be  necessary 
to  speak  of  socialism  and  communism  under  separate  heads. 
While  a  different  meaning  is  still  attached  to  those  terms  in 
some  countries,  they  are  frequently  used  synonymously  in  the 
United  States.  Communism  is  the  elder  term  and  socialism 
the  newer.  A  still  more  recent  term  is  collectivism.  It  is 
sanctioned  by  the  best  of  recent  writers.  Our  purpose  being 
simply  to  observe  the  controlling  ideas  of  the  socialistic  school, 
it  will  be  unnecessary  and  impossible  to  trace  the  shades  of 
thought  which  distinguish  communism,  socialism  and  collect- 
ivism in  Europe. 

What  Socialism  Means. — We  must  remember  that  we 
cannot  be  very  exact  when  we  attempt  to  sum  up  in  a  few 
paragraphs  the  substance  of  many  volumes  by  many  great 
thinkers.  Language  must  be  general.  The  simplest  illustra- 
tions of  the  meaning  of  socialism  will  be  the  best  for  our 
purpose,  and  perhaps  we  can  find  that  by  going  back  to  a  stage 
in  economics  which  we  have  passed.  For  instance,  it  has  been 
stated  that  in  the  family  stage  of  economics  property  is  owned 
in  common.  The  statement  applies  also  to  the  economy  of  the 
primitive  village  community.  The  early  village  is  an  economic 
unit.  Each  member  of  the  community  labors  in  the  common 
field.  The  harvests  are  gathered  into  a  common  storehouse 
whence  they  are  parceled  out  to  each  family.  In  the  enlarged 
households  of  partially  agricultural  tribes,  there  are  communal 


LAND,  LABOR   AND    CAPITAL.  167 

dwellings  owned  in  common  by  the  members  of  the  house- 
hold, like  the  long-houses  of  the  Iroquois.  Subsistence  is  in 
common.  In  all  these  instances  there  is  perfect  community  of 
living  and  all  property  is  collective.  This  community  of  living 
which  characterizes  the  primitive  economic  stages  forms  the 
basis  of  socialism  as  advocated  at  the  present  day.  It  aims  at 
collective  ownership,  by  the  community  or  state,  of  all  property 
used  in  productive  industry.  Property  is  to  be  nationalized. 
It  demands  that  all  industry  shall  be  carried  on  under  the 
direction  of  the  state.  Free  competition  is  to  cease.  There 
shall  be  neither  a  laboring  class  nor  a  capitalistic  class.  Every 
member  of  the  community  shall  devote  himself  to  some  pro- 
ductive work  and  he  shall  receive  in  return,  as  the  result  of  his 
own  labor,  according  to  some  socialists,  (1)  a  distribution  of 
the  profits  in  proportion  to  his  needs.  According  to  others 
there  must  be  (2)  a  perfect  equality  of  distribution  without 
reference  to  needs,  and  without  reference  to  merit  of  service  of 
the  individual.  Still  others  advocate  that  each  individual  of 
the  community  is  to  be  rewarded  (3)  according  to  the  service 
which  he  renders  the  community.  A  fourth  class  say  that 
distribution  of  the  good  things  of  life  is  to  be  (4)  according  to 
the  capacity  of  each  individual.  The  prime  distinction 
between  the  various  socialistic  schools  is  founded  on  adherence 
or  non-adherence  to  some  one  of  these  plans  of  distributing  or 
sharing  the  products  of  the  common  labor. 

Industrial  Democracy,  is  the  end  of  socialism.  In  itself 
industrial  democracy  has  few  objective  features,  but  all  who 
desire  it  are  not  socialists.  Some  believe  that  it  may  be  attained 
by  voluntary  co-operation.  In  the  state  of  industrial  democ- 
racy there  is  to  be  a  common  ownership  of  the  means  of  pro- 
duction under  the  common  management,  but  with  private 
ownership  and  enjoyment  of  income.  To  establish  this 
industrial  state,  as  it  exists  in  theory,  a  far-reaching  trans- 
formation must  take  place  in  the  organization  of  society. 
Property  must  be  transformed  and  pass  from  private  ownership 
to  public  ownership.  Industry  must  be  transformed  so  that 
the  state  will  command  it,  whatever  the  disposition  of  the 
individual  members.     The  state  loses  its  political  character. 


168  DESCRIPTIVE  ECONOMICS. 

It  becomes  an  economic  organization,  "analogous  to  the  admin- 
istrative council  of  a  huge  co-operative  society  embracing  the 
entire  country."  Money  as  a  medium  of  exchange  will 
disappear  because  there  will  be  no  use  for  it.  No  man  will'be 
obliged  to  sell  his  labor  or  buy  his  wants,  because  the  state  will 
furnish  him  employment  and  look  after  his  wants. 

Beautiful  in  Theory. — As  a  theory,  socialism  has  many 
attractive  sides.  It  appears  to  be  a  perfect  solution  of  the 
struggle  for  a  living,  and  from  that  point  of  view,  it  is  lovely 
to  the  eye  of  the  shiftless  and  improvident.  It  would  mean 
the  abolition  of  all  trusts  and  monopolies — monopolies  of  soil 
or  monopolies  of  capital.  It  would  prevent  aggregation  and 
concentration  of  wealth.  There  would  be  no  impoverishment 
of  the  employe  classes,  because  every  man  would  be  as  rich  as 
every  other  man,  and  the  state  would  be  the  only  employer.  It 
would  put  an  end  to  the  irrepressible  collision  between  capital 
and  labor.  It  is,  therefore,  favored  by  philanthropists  and 
humanitarians  who  have  real,  genuine  sympathy  for  the  less 
fortunate  classes.  Socialistic  discussion  is  worthy  of  encour- 
agement if  for  no  other  purpose  than  to  draw  attention  to 
social  reform  and  social  problems. 

Theory  and  Practice. — The  theory  of  Socialism  is  one 
thing  ;  the  practice  of  it,  including  the  plans  by  which  society, 
as  now  constituted,  is  to  be  transformed,  is  quite  a  different 
thing.  It  is  in  regard  to  the  practice — the  putting  into  effect 
of  socialistic  theories — that  the  greatest  diversity  of  opinion 
exists.  Socialism  looks  well  and  reads  well  on  paper,  but  the 
problem  of  carrying  it  into  effect  is  still  to  be  solved.  It  is 
more  than  likely  that  ages  must  elapse  before  it  will  be  possible 
of  practice,  just  as  ages  have  been  required  for  the  evolution  of 
the  existing  state  of  industrial  society.  Industrial  democracy 
being  the  goal,  the  means  by  which  it  is  hoped  to  be  attained 
are  two-fold.  (1)  Voluntary  co-operation.  (2)  Coercive  co- 
operation or  socialism.  The  latter  involves  the  use  of  the 
power  of  the  state  to  compel  co-operation  and  regulate  industry. 
The  manner  of  applying  coercion  and  of  using  the  State  gives 
rise  to  various  schools  of  socialism  and  shades  of  socialistic 
thought. 


LANDy  LABOR  AND    CAPITAL.  169 

Other  "  Isms.** — Socialism,  as  a  theory,  has  rested  under  a 
cloud  because  of  the  various  "isms"  which  have  from  time  to 
time  become  connected  with  it.  They  are  such  as  Anarchism, 
Materialism,  Nihilism,  Atheism,  Free  Love,  and  other 
schemes  of  both  evil  and  well-meaning  dreamers.  Eeal  social- 
ism, as  we  have  seen,  is  none  of  these. 

Anarchism — Is  important  enough  to  deserve  a  word  by 
itself.  Socialism,  in  so  far  as  it  seeks  the  establishment  of 
industrial  democracy  by  peaceful  and  orderly  means,  is  not 
morally  blameworthy.  It  involves  nothing  contrary  to  justice 
and  good  morals.  Anarchism,  however,  is  morally  blame 
worthy.  It  is  bad  in  theory  and  worse  in  the  plans  by  which 
it  is  sought  to  be  put  into  effect.  The  socialists  ask  that  all 
industries  shall  be  pursued  in  common  and  under  the  manage- 
ment of  the  state.  The  anarchists  demand  that  the  state  itself 
shall  be  abolished  ;  that  there  shall  be  no  government,  but  each 
individual  shall  exercise  authority  for  himself.  Anarchists 
deny  the  right  of  society  to  organize  government  which  shall 
exercise  authority  over  individuals.  In  place  of  government, 
they  claim  that  each  individual  shall  have  the  right  to  federate 
himself  with  others  as  he  may  see  fit,  and  each  federated  com- 
munity thereupon  make  its  own  laws  according  to  its  might. 


170  DESCRIPTIVE  ECONOMICS. 


CHAPTER  III. 

THE    DIVISION   OF   EMPLOYMENTS. 

The  Growth  of  the  Division. — The  study  of  the  econom- 
ics of  the  family  showed  us  that  it  concerns  a  stage  of  indus- 
trial society  without  division  of  employments.  The  members 
of  the  economic  family  do  not  divide  up  their  work  and  each 
one  devote  himself  to  some  particular  kind  of  labor.  Each 
man  employs  himself  indiscriminately  in  gathering  wild  fruits, 
in  hunting  or  fishing.  Even  the  distinctions  of  sex  rarely 
produce  a  division  of  labor.  When  the  village  community  is 
developed,  one  man  becomes  a  herdsman,  another  works  a-field 
and  another  becomes  a  carpenter.  The  increased  wants  of  life 
necessitate  an  increase  in  the  means  of  satisfying  them,  and 
the  time  comes  when  a  man  cannot  be  a  "  jack  of  all  trades." 
The  result  is  that  each  man  is  set  free  to  devote  himself  to  a 
more  limited  number  of  pursuits.  City  economics  produces  a 
still  more  minute  division  of  employments.  The  agriculturist 
is  now  set  free  to  devote  himself  wholly  to  tillage,  while  the 
craftsman  can  give  his  undivided  attention  to  working  up  raw 
materials  into  utensils  and  clothing. 

The  Present  Division. — The  development  of  the  indus- 
trial stage  of  economics  brings  with  it  a  corresponding  devel- 
opment of  division  of  employments.  Every  advance  of  indus- 
trial society  sees  a  corresponding  diversity  of  occupation.  In 
this  regard  the  growth  of  industrial  society  is  likened  to  the 
growth  of  a  tree  which  first  puts  out  large  main  branches. 
They  represent  the  simple  employments  of  the  village  life. 
These  branches  sub-divide  as  occupations  sub-divide,  with  the 
beginning  of  the  city  life.  The  full  grown  tree  with  its  many 
shoots  and  twigs,  is  the  division  of  employments  in  the  national 
stage  of  economics.  The  process  is  like  the  growth  of  com- 
plexity in  the  structural  organization  of  animals,  ascending 
from  the  lower  to  the  higher  orders. 


TSU  DIVISION  OF  EMPLOYMENTS.  171 

Incidental  Duties  becoming  Occupations. — In  the  early 
stages  of  industrial  organization  there  are  many  duties  incident 
to  every  man's  daily  life.  No  one  of  these  duties  composes  his 
occupatioti.  They  are  all  simply  incidents.  As  wants  in- 
crease with  the  advent  of  higher  industrial  organization,  that 
which  was  an  incidental  duty  becomes  a  livelihood.  Many  of 
the  industries  in  which  men  now  engage  for  stated  employment 
were  part  of  the  domestic  duties  a  few  years  ago,  and  were  car- 
ried on  in  the  household  for  the  benefit  of  the  family. 

Divisions  in  Manufacturing. — The  various  mauufacturing 
processes  afford  good  illustrations  of  the  progress  in  the  divis- 
ion of  employments.  Let  us  take  one  of  the  most  ordinary 
occupations,  that  of  the  shoemaker,  for  instance.  The  village 
shoemaker  was  both  cobbler  and  shoemaker  proper.  His  bun- 
dle of  leather  for  repairs  as  well  as  for  a  complete  shoe,  came 
to  him  on  the  village  stage  coach.  He  took  the  raw  product, 
cut  it  out  and  by  slow  manipulation  turned  it  into  a  shoe.  In 
this  day  there  are  hardly  any  shoemakers  left.  The  shoemak- 
er's shop  has  become  simply  a  cobbler's  shop.  Men  are  now 
cobblers,  cutters,  vampers  or  lasters.  They  follow  some  one  of 
the  forty  or  fifty  occupations  connected  with  a  modem  shoe 
factory. 

The  Gain  to  Industrial  Society. — There  are  many  ways 
in  which  the  division  of  employments  works  a  real  gain  to 
industrial  society.  There  is  a  saving  in  the  amount  of  capital 
invested  in  tools.  If  all  the  shoes  worn  by  the  people  of  the 
United  States  were  made  after  the  practice  of  the  village  shoe- 
maker, and  each  manufacturer  had  the  full  kit  of  tools  with 
which  he  must  be  provided,  a  large  portion  of  the  capital  in- 
vested would  be  lying  idle  much  of  the  time.  Each  man  could 
use  only  one  of  his  tools  at  a  time.  One  shoemaker's  awl  does 
not  involve  the  investment  of  much  capital,  but  the  tens  of 
thousands  and  even  millions  of  awls  that  would  be  required, 
and  which  would  be  lying  idle  while  their  owners  were  cutting 
uppers  or  polishing,  would  mean  a  large  amount  of  idle  capi- 
tal. There  was  a  time  when  nearly  every  family  possessed  a 
buckskin  needle,  but  most  people  now  live  and  die  without 
seeing  one.    The  capital  required  by  the  family  is  just  so  much 


172  DESCRIPTIVE  ECONOMICS. 

less.  Again,  there  is  the  increased  eflBciency  of  labor,  by  rea- 
son of  the  increased  skill  which  a  man  acquires,  when  he 
devotes  himself  to  a  single  occupation.  The  modern  artisan 
accomplishes  more  and  does  better  work  than  the  artisan  of 
the  olden  times,  because  he  gives  his  attention  to  one  class  of 
work.  Better  and  more  costly  tools  and  utensils  of  labor  are 
possible,  because  they  can  always  be  in  use  and  producing  a 
revenue.  The  village  smith  cannot  afford  a  great  lathe,  cost- 
ing hundreds  of  dollars,  because  he  has  not  steady  work  for  it. 
Another  important  gain  lies  in  the  fact  that,  by  reason  of  the 
multiplication  of  employments,  men  can  find  occupations 
suited  to  their  natural  aptitudes.  Every  man  can  find  some- 
thing for  which  he  has  a  native  bent,  and  in  choosing  his  occu- 
pation he  can  take  into  account  his  physical  characteristics. 
A  keen  sense  of  touch,  of  taste  or  of  smell,  may  cause  him  to 
be  peculiarly  adapted  to  a  particular  occupation.  There  are 
gains  in  other  ways  than  those  enumerated.  They  are  all 
summed  up,  however,  by  stating  that  the  division  of  employ- 
ments increases  the  eflBciency  of  labor.  The  struggle  of  the 
day  demands  that  each  man  shall  make  his  labor  as  eflScient  as 
possible. 

Disadvantages  of  the  Division. — It  tends  to  make  men 
olie-sided.  It  is  apt  to  develop  certain  faculties  at  the  expense 
of  others.  It  produces  ill-balanced  minds,  and  we  hear  the 
complaint  that  there  are  so  few  "all-around"  men,  as  they  are 
termed — men  who  are  versed  in  many  arts  and  sciences.  It 
takes  what  is  called  *'life"  out  of  an  occupation.  It  renders 
a  man's  pursuits  soul-less.  The  watchmaker  who  makes  a 
whole  watch  takes  interest  in  his  work,  because  he  observes 
progress  in  the  construction  and  adaptation  of  the  various 
parts.  The  mechanism  becomes  a  thing  of  life  and  awakens 
his  sympathies.  On  the  other  hand,  the  employe  of  a  watch 
factory  who  makes  a  single  part,  such  as  wheels  of  one  kind, 
day  after  day,  is  liable  to  beget  a  sluggish  intellect.  He  be- 
comes a  mere  machine. 

The  Dependence  following  the  Division. — When  em- 
ployments become  highly  divided,  and  the  various  processes 
of  production  are  apportioned  into  many  forms  of  labor,  men 


THB  DIVISION  OF  EMPLOYMENTS.  173 

increase  their  dependence  upon  each  other  correspondingly. 
When  there  are  only  half  a  dozen  different  employments,  as  in 
the  primitive  village  community,  there  is  but  little  interde- 
pendence". Economic  dependence  commences  then,  however, 
and  it  grows  with  each  successive  economic  stage,  until  the 
time  comes  when  every  man  places  some  reliance  upon  the 
labor  of  other  men,  for  the  satisfaction  of  his  wants.  In  the 
modern  shoe  factory  all  the  workers  depend,  first  of  all,  upon 
the  cutters,  who  take  the  hides  and  cut  out  the  various  parts 
of  the  shoe.  The  stitchers,  the  lasters  and  the  finishers  must 
perform  their  various  parts.  If  one  set  fails,  all  hands  must 
stop  work.  This  dependence  is  slight  compared  with  that 
which  the  whole  body  of  operatives  places  upon  those  engaged 
in  other  departments  of  activity — upon  the  farmer  who  sup- 
plies them  with  meat  and  bread,  the  cloth  manufacturer  and 
tailor  for  a  supply  of  clothing,  and  the  trader  who  brings  the 
produce  of  the  farm  and  factory  to  where  it  is  wanted.  The 
farmer,  in  turn,  must  depend  upon  the  workers  in  the  shoe 
factory  for  his  boots  and  shoes,  and  upon  other  artisans  for  the 
various  utensils  of  husbandry.  The  town  or  city  where  one 
class  of  manufacturers  predominates,  must  depend  upon  other 
towns  and  cities  where  other  manufactures  are  produced. 
Village  depends  upon  village,  villages  depend  upon  towns, 
towns  upon  cities,  and  cities  upon  the  economic  activity  of  the 
world  at  large.  Each  individual  possesses  a  certain  private 
economy  which  goes  to  make  up  the  economy  of  the  whole. 
Every  man  in  the  nation  has  his  place.  While  this  book  is  in 
preparation,  the  author,  the  publisher,  the  compositor,  the 
proof-reader  and  the  pressman,  and  indirectly  many  persons 
engaged  in  other  occupations,  must  rely  on  the  performance  by 
other  persons  of  their  part  in  the  organism  of  industrial  society. 


174  DESCRIPTIVE  ECONOMICS. 


CHAPTER  IV. 

THE   ECONOMICS  OF   POPULATION. 

Malthusianism. — It  was  in  the  year  of  our  Lord  seventeen 
hundred  and  ninety-eight,  just  about  a  century  ago,  that 
Thomas  A.  Malthus,  a  clergyman  of  Surrey,  published  what  he 
called.  An  Essay  On  Population.  There  was  great  discontent 
throughout  the  whole  of  Great  Britain  as  well  as  on  the  Con- 
tinent. Malthus  began  a  study  of  politics  and  endeavored  to 
find  the  causes  of  the  discontent.  He  started  out  with  the 
purpose  of  proving  that  the  Governments  of  Europe,  which 
were  charged  with  the  prevailing  hard  times,  had  nothing  to 
do  with  it.  He  was  endeavoring  to  find  natural  causes  for  the 
condition  of  things,  beyond  the  power  of  the  ruling  classes  to 
produce.  The  result  of  his  study  was  the  discovery  of  what  he 
called  the  **law  of  population."  In  substance,  his  law  is  that 
population  increases  in  a  geometrical  ratio,  as  2,  4,  8, 16,  32, 
while  the  food  supply  increases  only  in  an  arithmetical  ratio, 
as  2,  4,  6,  8,  10. 

What  if  Malthus  were  Right? — If  the  theory  which 
Malthus  advanced  concerning  the  growth  of  population  were 
correct,  the  number  of  the  people  on  the  face  of  the  earth 
would  soon  exceed  the  supply  of  food.  In  two  centuries  the 
population  would  be  to  the  means  of  subsistence  as  256  is  to  9, 
and  long  before  that  time  people  would  be  starving  to  death. 
For  instance,  in  the  United  States,  the  population  doubles  at 
least  once  in  twenty-five  years.  If  it  continued  to  increase  in 
a  geometrical  ratio,  in  two'  hundred  and  fifty  years  it  would  be 
more  than  sixty  thousand  millions.  Professor  Ely  illustrates 
the  increase  in  this  way:  **Let  us  suppose  that  there  are  only 
two  people  on  the  face  of  the  earth  and  population  doubles 
once  in  fifty  years.  At  the  expiration  of  three  thousand  years 
the  whole  surface  of  the  earth,  land  and  sea,  would  be  covered 
with  people  piled  one  on  top  of  the  other  eight  hundred  deep," 


THE  ECONOMICS    OF  POPULATION.  175 

Increase  of  the  Animal  World. — We  may  have  recourse 
to  the  animal  world  again  for  more  emphatic,  as  well  as  for 
more  interesting  illustrations  bearing  upon  this  subject.  Some 
of  the  lower  forms  of  animals  increase  with  startling  rapidity, 
and  were  it  not  for  the  checks  upon  increase,  the  earth  would 
be  overrun  with  them.  Men  would  stand  but  little  chance  of 
subsisting.  A  single  Infusorian,  for  instance,  may  be  the  an- 
cestor of  millions  within  a  week.  It  is  said  that  the  female  of 
some  species  of  the  Aphis  often  produces  one  offspring  per 
hour,  for  many  days  consecutively.  At  this  rate,  in  a  single 
season,  a  progeny  would  be  produced  which  would  "weigh  down 
five  hundred  millions  of  stout  men."  A  startling  example  of 
animal  increase,  is  that  of  the  cod  fish.  "The  roe  of  a  cod 
contains  sometimes  nearly  ten  millions  of  eggs,  and  supposing 
each  of  these  produced  a  young  fish  which  arrived  at  maturity, 
the  whole  sea  would  forthwith  become  a  solid  mass  of  closely 
packed  cod  fish."  Only  a  small  proportion  of  the  progeny  of 
the  lower  animals,  however,  attains  maturity.  The  struggle 
of  life  with  them,  is  such,  that  very  few  survive  it.  Their 
propagation  has  been  likened  to  the  fable  of  Mirza's  Bridge — 
few  get  across.  In  the  light  of  these  facts  the  mistake  which 
Malthas  made  is  more  evident.  It  is  as  though  he  had  started 
out  to  picture  the  catastrophe  which  was  about  to  ensue  by  the 
ocean  becoming  overstocked  with  cod-fish,  basing  his  calcula- 
tion upon  the  assumption  that  every  egg  produces  a  full  grown 
fish. 

The  Downfall  of  Malthus. — Nearly  a  century  having 
passed  since  Malthus  announced  his  discovery,  we  ought  to 
see  some  signs  of  this  appalling  increase  of  population,  as  com- 
pared with  the  means  of  subsistence.  The  fact  that  there  are 
still  no  signs  of  it,  proves  that  he  was  wrong.  His  law  was  no 
law.  His  deductions  were  incorrect.  Population  does  not  in- 
crease in  the  geometrical  ratio.  The  growth  of  population  as 
compared  with  the  increase  of  the  means  of  subsistence,  is  not 
as  disproportionate  as  Malthus  believed,  and  as  a  great  many 
learned  men  of  his  day  believed,  when  they  read  his  essay. 

Checks  on  Population. — Malthus'  chief  error  consisted  in 
failing  to  allow  for  the  various  checks  on  the  growth  of  popu- 


176  DESCRIPTIVE  ECONOMICS. 

lation.  He  did  not  allow  for  positive  checks  like  plagues,  in- 
temperance, crime  and  war.  There  may  be  localities  where  for 
short  periods  the  population  increases  in  the  ratio  proposed  by 
Malthus.  Sooner  or  later,  however,  these  checks  upon  increase 
come  into  play.  When  the  growth  of  population  presses 
closely  upon  the  means  of  subsistence,  vice,  disease  and  pesti- 
lence are  more  active  and  effective  and  the  birth  rate  decreases. 
There  are  negative  checks  which  Malthus  may  be  excused  for 
having  overlooked  at  the  time.  It  is  now  pretty  well  ascer- 
tained that  as  civilization  advances  and  takes  on  a  higher  char- 
acter and  wants  become  more  numerous  and  of  a  more  costly 
nature,  the  growth  of  population  is  less  rapid.  In  all  depart- 
ments of  the  world  of  life,  increase  becomes  less,  ascending 
from  the  lower  structural  organization  to  the  higher.  A  grain 
of  wheat  multiplies  at  the  rate  of  two-hundred  fold  annually. 
The  rate  of  propagation  in  the  vegetable  is  much  greater  than  in 
the  animal  world.  The  lower  forms  of  animal  life  propagate 
faster  than  the  higher  forms. 

The  Increase  of  Subsistence. — A  little  investigation  will 
show  that  Malthus  must  have  been  wrong  also  in  his  statement 
of  the  increase  of  food  supply.  Instead,  of  becoming  less  in 
proportion  to  the  increase  of  population,  it  becomes  greater. 
The  food  supply  in  the  present  or  industrial  stage  of  economics, 
is  greater  in  proportion  to  population,  and  of  a  better  quality, 
than  ever  before.  The  subject  may  be  illustrated  by  compar- 
ing the  condition  of  the  inhabitants,  of  what  is  now  the  Empire 
State,  at  the  landing  of  Columbus,  with  the  condition  of  the 
present  population  of  the  same  territory.  That  state  never 
contained  within  its  boundaries  more  than  twenty-five  thousand 
Indians.  Existence,  among  them,  was  a  desperate  struggle  for 
the  necessary  wants.  Hunger  was  almost  a  daily  sensation. 
Famines  came  with  regularity  and  starvation  stared  them  in  the 
face  for  a  large  portion  of  the  year.  Where  twenty-five  thousand 
of 'them,  or,  one  to  every  one  hundred  and  twenty-one  acres,  were 
engaged  in  a  constant  search  for  food, — over-feeding  when 
game  was  abundant  and  when  the  corn  was  ripe,  starving  when 
the  game  was  scarce  and  the  corn  was  gone, — six  millions  of 
people,  or  about  one  to  every  five  acres,  live  in  peace  and 
plenty. 


THE  ECONOMICS   OF  POPULATION.  177 

Food  and  Civilization. — The  rule  for  New  York  is  good 
the  world  over.  As  civilization  advances  and  population  in- 
creases, subsistence  becomes  more  certain  and  more  adequate  to 
meet  the'  wants  of  the  population.  In  the  early  stages  of 
economics  when  men  have  little  command  over  the  forces  of 
nature,  the  sources  of  subsistence  are  limited  accordingly.  As 
population  increases  and  begins  to  press  upon  the  means  of 
subsistence,  men  begin  to  overcome  natural  forces  and  increase 
the  sources  of  food  supply.  They  first  add  wild  game  to  the 
frugiferous  subsistence.  Then  they  introduce  animal  domes- 
tication. Next  they  cultivate  the  farinaceous  plants.  In  the 
present  stage  of  economics,  when  all  the  factors  in  production, 
agriculture,  commerce  and  manufactures,  go  hand  in  hand, 
the  possibilities  of  food  resources  are  almost  incalculable.  The 
evolution  of  industrial  society  is  accompanied  by  evolution  of 
food  supply — food  of  a  more  varied  character  and  better 
quality. 

Efficiency  of  Labor. — One  of  the  causes  of  the  increase  of 
subsistence,  is  the  increasing  efficiency  of  labor,  ascending 
from  the  lower  of  the  industrial  stages  to  the  higher.  The 
labor  of  a  single  inhabitant  of  the  Empire  State  is  more  pro- 
ductive than  the  labor  of  ten  Senecas.  Agriculture  is  more 
productive  and  agricultural  labor  more  efficient.  Modern 
machinery  and  mechanical  appliances  frequently  enable  one 
man  to  accomplish  more  than  scores  of  men  could  accomplish 
in  the  age  of  Malthus.  The  forces  of  steam  and  electricity 
have  revolutionized  the  ways  of  getting  a  living.  Malthus 
would  not  have  promulgated  his  law  of  population  had  he 
dreamed  of  the  "  broom  stick  train." 

The  More  the  Better. — We  have  wholly  lost  the  signif- 
icance of  descriptive  economics,  if  we  have  not,  by  this  time, 
discovered  that  the  greater  the  number  of  people  inhabitating 
a  territory  and  uniting  their  industries,  the  greater  will  be 
their  mastery  over  nature,  and  the  greater  will  be  the  number 
of  the  good  things  of  life  which  they  will  possess.  "Progress 
and  poverty  "  is  false  in  name  and  false  in  fact.  Economics 
has  yet  to  teach  us  that  there  has  been  anything  but  progress 
from  poverty  and  barbarism  to  wealth  and  civilization. 
12 


178  DESCRTPTTVE  ECONOMTCS. 

The  Power  of  Nature  Liimited. — While  it  is  true  that 
the  growth  of  population  has,  in  our  time,  been  attended  with 
an  amelioration  of  the  material  welfare  of  the  race,  because  of 
the  increased  means  of  satisfying  wants  through  the  enlai-ge- 
ment  of  the  productive  powers  of  nature,  there  must  be 
recognition  of  the  fact  that  nature's  powers  are  limited.  There 
must  of  necessity  be  a  limit.  The  time  must  come  when  the 
earth  shall  have  been  utilized  to  its  utmost  capacity  ;  when  the 
fields,  the  forest  and  the  mine  can  do  no  better.  A  point  will 
be  reached  in  tillage,  when  an  increased  application  of  labor 
and  capital  will  not  result  in  a  corresponding  increase  of  pro- 
duct. In  other  words,  there  is  a  limit  to  the  profitable  ex- 
penditure of  labor  and  capital.  This  is  called  the  law  of 
diminishing  returns.  It  assumes  that  intensive  agriculture 
will  not  be  profitable  after  a  certain  point,  and  when  that  point 
is  reached,  increased  energy  applied  to  culti%ation  will  not  sup- 
port a  corresponding  increase  of  population.  The  rule  holds 
good  as  to  all  industries  directly  connected  with  the  production 
of  commodities  designed  for  the  satisfaction  of  material  wants, 
from  natural  sources.  Thus  the  silver  miners  of  Montana  find 
that  there  is  a  limit  to  the  depth  which  they  can  delve  in  the 
earth  and  profitably  bring  forth  silver  ore.  Lumbermen  have 
utilized  great  labor  saving  conveniences,  so  that,  although  the 
forests  have  become  thin  and  scattered,  yet  they  have  been 
able  to  manufacture  lumber  so  much  more  cheaply  than  our 
forefathers,  as  to  continue  to  manufacture  it  at  a  profit.  They 
find,  however,  that  the  time  comes  when  the  timber  becomes 
so  sparse  and  scattered  that  even  the  very  best  methods  of  mak- 
ing lumber  will  not  enable  them  to  do  it  profitably. 

Not  Worth  Our  Worry. — While  all  these  things  are  true 
enough,  it  is  scarcely  worth  while  for  us  to  worry  about  the 
approach  of  the  time  when  the  earth  can  support  no  greater 
population.  When  we  are  told  that  if  it  were  not  for  the  law 
of  diminishing  returns,  thousands  of  millions  of  men  might 
live  in  the  United  States  as  comfortably  as  tens  of  millions,  it 
is  an  economic  fact  of  which  we  recognize  the  truth,  but  it 
need  not  give  us  great  concern.  It  is  doubtful  whether  any 
country,  even   the   most  densely  populated  part  of  Asia,  has 


THE  ECONOMICS   OF  POPULATION.  179 

yet  utilized  all  its  natural  capacities  so  that  it  cannot  profitably 
produce  more  and  support  a  larger  population.  If  China 
should  proceed  to  practice  the  economics  of  the  United  States, 
to  adopt  all  our  labor  saving  appliances,  and  make  labor  as 
effective  and  productive  as  with  us,  there  is  no  telling  the  ex- 
tent to  which  her  population  might  increase  without  starvation 
ensuing.  The  saying  is  that  *^a  franc's  worth  of  coal  does  the 
work  of  a  laborer  for  twenty  days."  We  use  coal  but  China 
does  not.  We  make  our  labor  twenty  times  as  productive  as 
labor  in  China.  Therefore,  poor  land,  the  barren  hill-side, 
can  be  profitably  tilled,  marsh  lands  can  be  drained  and  the 
productive  area  enlarged.  In  these  ways  the  point  of  diminish- 
ing returns  seems  to  be  set  back  a  thousand  years  by  the  in- 
ventions of  a  single  year.  We  certainly  need  not  worry  over 
the  prospect  of  starvation  for  the  race  until  a  large  portion  of 
the  earth's  surface  has  reached  the  point  of  diminishing  returns. 
The  youngest  reader  of  this  book  will  barely  see  the  great, 
prolific,  central  table  land  of  Africa  fairly  well  populated,  and 
its  resources  fairly  developed.  That  table  land  has  the  soil, 
climate  and  natural  resources  capable  of  supporting  millions 
of  people  in  health  and  comfort.  There  are  other  portions  of 
the  earth's  surface  which  must  yet  be  brought  beneath  the 
husbandman's  sway.  When  a  beginning  has  been  made  toward 
the  reduction  of  these  unoccupied,  fertile  spots  of  earth,  to  a 
productive  state,  then  we  may  commence  to  feel  discomfort, 
because  the  world  may  sometime  be  unable  to  support  her 
inhabitants. 


180  DESCRIPTIVE  ECONOMICS. 


CHAPTER    V. 

GRO>A/^TH  OF  THE  INDUSTRIAL  REVOLUTION. 

Its  Historical  Meaning-. — The  term,  industrial  revolution, 
is  frequently  applied  to  certain  economic  changes  which  took 
place  at  the  close  of  the  middle  ages.  Medieval  customary 
regulations  which  had  previously  controlled  industry  gave  place 
to  modern  regulations.  Free  competition  took  the  place  of 
custom.  From  the  point  of  view  of  descriptive  economics, 
however,  it  is  preferable  to  consider  that  there  has  always  been 
an  industrial  revolution ;  that  it  commenced  with  the  inven- 
tion of  the  fishhook  and  the  bow  and  arrow,  and  has  continued 
with  the  spinning-jenny,  the  cotton-gin  and  the  telegraph. 
According  to  this  view  the  industrial  revolution  is  the  continual 
progress  of  mankind  through  discoveries  and  inventions. 
This  progress  has  not  always  been  uniform.  Certain  periods 
can  be  pointed  out  when  advancement  has  been  particularly 
marked  and  there  are  other  periods  when  the  progress  has  been 
hardly  appreciable. 

Progress  Intermittent. — A  few  inventions  or  changes  in 
economic  methods,  which  are  in  themselves  very  important, 
are  sometimes  pointed  out  by  economists  as  the  accompaniments 
of  the  industrial  revolution.  Such  suggestions  derive  force 
from  the  fact,  already  referred  to,  that  progress  through  inven- 
tions and  discoveries  is  by  great  leaps.  Each  leap  includes  a 
period  of  considerable  duration.  After  each  leap  there  is  a 
period  of  rest. 

The  Seen  and.  tlie  Unseen. — Some  discoveries  appear  to  us 
to  have  played  an  important  part  in  the  industrial  revolution, 
because  we  can  see  and  directly  measure  their  results.  In 
other  instances  the  results  are  not  seen  because  they  are 
indirect.  For  instance,  the  discovery  of  the  uses  of  steam  will 
be  set  down  as  one  of  the  inventions  producing  great  ameliora- 
tion in  the  material  condition  of  man.     We  can  see  the  results. 


GROWTH  OF  THE  INDUSTRIAL  REVOLUTION.  181 

The  same  suggestions  may  be  made  regarding  the  invention  of 
the  fishhook.  We  see  and  understand  how  the  lot  of  the 
primitive  fisherman  was  bettered  by  its  discovery.  The 
Fuegians  still  fish  with  the  bait  tied  to  the  end  of  a  string  and 
depend  for  success  upon  dexterity  in  landing  the  fish  before  it 
can  disgorge  the  bait.  We  can  see  how  much  better  would  be 
their  condition  had  they  good  fishing  appliances.  We  do  not 
see  how  electric  street  cars  facilitate  our  getting  a  living.  We 
observe  that  they  are  great  conveniences,  but  we  cannot  sit 
down  and  compute  their  industrial  utility.  We  do  not  see  how 
they  enable  us  to  save  time ;  to  get  to  our  work  quicker  ;  to 
have  more  hours  for  recreation  ;  how  they  set  us  free  for  other 
activities. 

The  Modern  Industrial  Revolution. — What  is  the  char- 
acter of  the  industrial  revolution  of  this  industrial  stage  of 
economics  ?  The  subject  of  this  chapter  cannot  be  dismissed 
without  some  reference  to  the  far-reaching  changes  in  methods 
of  getting  a  living  which  have  taken  place  in  recent  times. 

The  Revolution  in  Farming. — We  are  accustomed  to  con- 
nect improvements  in  agriculture  with  better  and  more  scientific 
inethods  of  tillage,  with  more  intensive  and  less  extensive 
farming.  These  subjects  suggest  only  one  phase  of  the  revolu- 
tion. Another  phase  relates  to  the  improvement  of  the 
domestic  animals.  It  was  only  about  a  century  ago  that  the 
Southdown  weighed  forty  pounds  or  less  and  sheared  two  or 
three  pounds  of  woolly  hair.  To-day  it  weighs  three  or  four 
times  as  much  and  shears  from  six  to  ten  pounds  of  pure  wool. 
Similar  improvement  has  taken  place  in  the  stock  of  cattle  and 
horses.  All  the  domestic  animals  receive  better  care  and  are  cor- 
respondingly more  profitable.  A  considerable  portion  of  the 
revenue  of  the  average  American  farmer  comes  from  his  stock 
raising,  and  this  fact  gives  significance  to  the  industrial  revolu- 
tion in  agricultural  life.  American  agriculture,  it  is  said,  is 
about  to  experience  a  further  revolution.  What  the  trans- 
formation will  be  is  yet  uncertain.  Some  say  that  farms  will 
be  sub-divided  and  will  consist  of  small  holdings,  highly 
cultivated.  There  is  no  doubt  that  the  average  farm  is  not 
cultivated  to  the  best  advantage.     Many  a  farmer  would  be 


182  DESCRIPTIVE  ECONOMICS. 

better  off  if  he  would  abandon  one-half  of  his  farm,  decrease 
the  outlay  for  improvements  accordingly,  and  work  the  other 
half  intensively.  Another  class  of  writers  express  the  opinion 
that  the  farming  of  the  future  will  be  on  a  large  scale.  Small 
farms  will  be  merged  into  large  farms,  conducted  with  large 
capital  upon  systematic  business  lines,  just  as  great  corporations 
conduct  great  manufacturing  industries. 

The  Revolution  in  Manufacturing. — Man  has  acquired 
such  control  over  natural  forces,  that  one  man's  labor  will 
accomplish  fifty  per  cent,  in  many  cases,  and  frequently  seventy 
or  eighty  per  cent.,  more,  in  a  given  time,  with  less  effort  than 
ever  before.  Our  daily  bread  is  turned  out  by  machinery.  It 
is  estimated  that  the  labor  of  every  three  bakers  annually  turns 
into  loaves  one  thousand  barrels  of  flour.  Adam  Smith  tells 
what  evidently  appeared  to  him  to  be  a  marvelous  story.  It  is 
to  the  effect  that  ten  persons,  by  the  use  of  mechanical  appli- 
ances used  in  his  time,  could  make  forty-eight  thousand  pins  a 
day.  The  story  did  appear  a  little  marvelous  comparing  the 
number  of  pins  with  the  output  of  ten  workmen,  each  ham- 
mering out  pin  after  pin,  from  a  piece  of  wire  on  an  anvil. 
Three  men,  however,  can  make  seven  million  five  hundred 
thousand  pins  to-day,  and  make  them  much  better  than  they 
could  be  made  in  Adam  Smith's  time. 

Credit  Economy. — Commerce  and  industry  have  been  rev- 
olutionized by  the  credit  system.  It  is  the  day  of  credit 
economy  rather  than  of  money  economy.  By  means  of  the 
banks  and  the  banking  system,  vast  commercial  enterprises  are 
transacted  without  the  actual  transfer  of  any  money.  The 
function  of  the  bank  is  no  longer  that  of  money  keeper  and 
changer.  It  is  to  buy  and  sell  instruments  of  credit.  It  is 
said  that  in  large  cities  the  average  bank  handles  over  forty 
dollars  in  checks,  drafts,  and  other  instruments  of  credit  to 
one  dollar  in  actual  money.  Bank  notes,  and  "greenbacks" 
are  instruments  of  credit.  They  are  simply  promises  to  pay 
by  the  bank  issuing  them,  or  by  the  government  as  the  case 
may  be. 

Commercial  Credit. — This  represents  the  principal  phase 
of  the  existing  credit  economy.     A  manufacturer  of  shoes,  we 


GROWTH  OF  THE  INDUSTRIAL  REVOLUTION.  183 

will  say,  buys  his  hides  of  the  leather  merchant  on  sixty  or 
ninety  days  credit.  Before  the  credit  period  expires  he  is  able  to 
make  the  leather  into  shoes  and  sell  them.  He  takes  the  cash 
received  and  pays  on  account  to  the  leather  merchant.  But  he 
has  been  obliged  to  give  credit  on  the  sale  of  many  of  his 
shoes.  He  may  satisfy  the  leather  merchant  by  giving  notes,  or 
notes  of  his  customers,  for  the  balance,  and  thus  both  the 
manufacturer  and  the  dealer  become  parties  to  the  credit 
transaction.  The  leather  merchant  may  have  procured  credit 
of  the  tanner  and  the  tanner  of  the  dealer  in  raw  hides.  It  is 
hard  to  trace  the  transaction  back  to  the  original  creditor. 
They  all  owe  more  than  the  cash  on  hand  will  pay.  The 
original  creditor  may  be  the  stock  raiser,  but  he  may  have 
borrowed  from  the  bank  until  he  can  realize  cash  from  the  sale 
of  his  cattle.  Perhaps  the  manufacturer  gave  the  leather 
merchant  a  note  in  the  first  instance.  The  leather  merchant 
discounts  it  and  uses  the  proceeds  and  the  bank  is  the  creditor. 
In  this  way  either  of  the  parties  to  tlie  transaction  is  able  to 
transact  an  enormous  volume  of  business  as  compared  with  the 
amount  of  capital  invested. 

Summing  up  the  Industrial  Revolution. — The  struggle 
of  man  with  nature  has  practically  ceased.  Now  and  then  she 
is  able  to  inflict  a  little  hardship  upon  him,  but  it  is  only  local 
and  it  furthermore  is  only  temporary.  Too  much  rain  or  too 
little  rain  may  cause  a  failure  of  crops  over  a  considerable  area, 
yet  there  is  no  famine  as  of  old.  Communication  and  transpor- 
tation are  such  that  a  suflficient  supply  comes  from  where  there 
is  a  surplus.  For  instance,  we  cannot  think  of  a  famine  in  any 
part  of  the  United  States.  The  idea  itself  is  incomprehensible. 
Agricultural,  commercial  and  manufacturing  industry  are  so 
closely  united,  there  is  such  widespread  co-operation  between 
the  factors  of  the  economy  of  the  modern  nation  that  we  are 
prone  to  consider  nature  as  utterly  routed.  There  is  much  to 
be  accomplished,  however.  There  is  a  wide  field  for  the  in- 
dustrial revolution.  "We  should  expect  that  it  will  progress  as 
in  the  past,  and  produce  still  better  economic  methods.  Of 
the  many  great  inventions  which  are  in  process  of  development, 
any  one  may  be  selected  to  illustrate  the  economic  changes  to 


184  DESCRIPTIVE  ECONOMICS. 

be  effected.  Marine  telegraphy,  for  instance,  would  revolu- 
tionize navigation.  Vessels  at  sea  being  able  to  communicate 
with  each  other  or  with  points  on  land,  the  perils  of  the  sea 
would  be  minimized.  Ocean  travel  would  become  almost  as 
safe  as  travel  on  land.  A  disabled  ship  could  send  out  its 
warning  signals  and  an  ocean  ambulance  hurry  to  its  aid. 
Marine  insurance  rates  would  be  lower.  The  risks  of  loss 
being  less,  more  money  would  be  invested  and  more  ships  built. 
Marine  freight  and  passsenger  rates  would  be  cheaper. 


THE  MONET  OF  THE  NATION.  185 


CHAPTER  VI. 

THE    MONEY   OF   THE    NATION. 

Introductory. — At  the  beginning  of  the  study  of  this  im- 
portant bra-nch  of  economics,  it  will  be  well  to  have  clearly  in 
mind  some  of  the  first  principles  relating  to  the  money  of  a 
nation.  Popular  conceptions  of  money  and  coinage  are  apt  to 
be  foggy.  There  are  many  errors  current.  Some  of  them  are 
due  to  the  tricks  of  the  politician's  trade.  For  instance,  you 
may  have  heard  in  political  harangues  the  declaration  that 
money  is  worth  nothing  in  itself;  that  it  is  simply  the  seal  of 
the  government  which  makes  the  dollar  worth  a  dollar.  Some 
of  the  things  of  which  we  must  have  a  clear  conception  may  be 
enumerated  as  follows: 

(1)  Money  has  four  functions:  It  is  a  measure  of  value;  a 
medium  of  exchange;  a  standard  of  value,  and  a  store  of  value. 

(2)  It  is  a  commodity,  an  article  of  commerce,  capable  of 
being  bartered  and  exchanged  like  other  commodities. 

(3)  It  is  a  product  of  labor,  and  is  worth  the  amount  of  la- 
bor necessary  to  produce  it,  that  is  to  mine  it,  smelt,  and  mint 
it  into  the  shape  of  the  desired  coin.  It  costs  a  dollar's  worth 
of  labor  to  get  a  dollar's  worth  of  gold  out  of  the  earth,  and 
coin  it  into  the  shape  of  the  dollar.  The  amount  of  labor  de- 
termines the  degree  of  value. 

(4)  It  has  general  acceptability,  or  as  is  sometimes  said 
utility.  This  utility  furnishes  a  basis  for  value.  The  utility 
of  the  precious  metals,  however,  for  the  purposes  of  money,  is 
conditioned  by  the  fact  that  they  cannot  be  obtained  without 
labor. 

(5)  Gold  is  not  wealth  any  more  than  potatoes  or  corn.  It 
simply  facilitates  exchanges,  and  for  that  purpose  is  more  suit- 
able and  convenient  than  potatoes  or  corn.  When  it  is  coming 
into  the  country  by  every  steamer  from  Europe,  it  does  not 
follow  that  the  country  is  becoming  wealthier.     When  it  is 


186  DESCRIPTIVE  ECONOMICS. 

going  out  there  is  no  call  for  mourning  on  the  ground  that  the 
country  is  becoming  so  much  poorer. 

The  Amount  of  Money  Needed. — Economic  writers  fre- 
quently devote  much  space  to  a  discussion  of  the  question. 
How  much  money  does  a  nation  need?  The  answers  which 
have  been  given  have  varied  according  to  the  economic  stage 
at  which  they  were  formulated.  The  answers  have  varied  also 
according  as  those  who  have  attempted  them  have  kept  in  view 
the  elementary  principles  of  finance  stated  in  the  preceding 
paragraph.  It  is  true  that  this  question  is  somewhat  perplex- 
ing. Perhaps  we  shall  best  study  it  by  observing  some  of  the 
answers. 

The  More  the  Better. — This  is  a  common  answer.  People 
are  prone  to  think  that  money  is  the  measure  of  wealth,  be- 
cause it  will  procure  all  the  material  good  things  which  they 
want.  It  naturally  occurs  to  us  that  the  more  a  nation  has  of 
it,  the  more  prosperous  the  nation  will  be.  The  argument 
runs  further,  that  money  is  a  tool  of  trade;  that  it  is  a  part  of 
every  individual's  capital  and  of  every  nation's  capital,  just  as 
the  tools  of  a  carpenter  are  a  part  of  his  capital,  and  therefore, 
the  more  money  a  nation  has,  the  more  capital  it  will  have, 
and  the  better  off  it  will  be.  In  this  connection,  it  is  interest- 
ing to  observe  some  of  the  comparisons  which  have  been  made 
by  different  writers,  at  various  periods  of  economic  history,  to 
illustrate  the  place  of  money  in  the  economic  activity  of  a  na- 
tion. It  has  been  compared  to  a  large  wheel  by  means  of 
which  a  due  share  of  the  means  of  subsistence  and  of  enjoy- 
ment is  distributed  to  each  member  of  society.  It  has  been 
compared  to  the  streets  and  roads  by  which  commerce  is  pos- 
sible and  is  carried  on.  Another  comparison  likens  it  to  oil 
which  greases  the  wheels  of  circulation.  Again,  money  is  said  to 
be  to  commerce  what  railways  are  to  locomotion — a  contrivance 
to  diminish  friction.  Still  another  writer  holds  that  money 
bears  the  same  relation  to  other  commodities  that  the  written 
language  of  a  people's  literature  bears  to  their  dialects. 

The  Amount  of  Money  is  Immaterial. — Another  view  of 
the  matter  holds  that  it  makes  no  difference  how  much  money 
ft  nation  has.    In  other  words,  it  is  wholly  immaterial  how 


THE  MONET  OF  THE  NATION.  187 

much  gold  and  silver  there  is  in  the  world.  It  is  a  matter  of 
no  consequence  so  far  as  the  welfare  of  nations  is  concerned. 
Those  who  hold  this  view  reason  that  because  gold  is  a  com- 
modity, when  it  is  more  abundant  than  other  commodities,  its 
value  will  simply  be  less  tlian  other  commodities  and  the  price 
of  other  commodities  will  rise.  When  it  is  scarce  prices  will 
fall.  An  abundance  of  money  will  not  enable  a  man  to  pro- 
cure a  greater  quantity  of  the  means  of  subsistence  in  exchange 
for  his  labor,  nor  will  a  scarcity  of  money  lessen  the  quantity 
which  he  can  procure  for  the  same  amount  of  labor.  There- 
fore, it  is  immaterial  to  him  whether  prices  are  high  or  low. 
If  money  is  abundant  then  in  proportion  as  the  prices  of  other 
commodities  rise,  he  has  more  money  to  use  in  making  pur- 
chases. It  would  be  said  for  instance,  that  the  fact  that  boots 
were  one  hundred  dollars  a  pair  in  the  Confederate  states  dur- 
ing the  civil  war  was  of  no  great  consequence  to  a  citizen  of 
one  of  those  states,  because  his  pockets  were  overflowing  with 
Confederate  scrip. 

The  Amount  Depends  upon  Economic  Conditions. — 
This  is  a  third  view  of  the  question.  Those  who  accept  it  say 
that  it  is  nonsense  to  give  a  general  answer  to  the  question,  one 
that  will  be  applicable  to  all  nations  at  all  times;  that  it  is  folly 
to  try  to  figure  out  the  exact  amount  of  money,  in  dollars  and 
cents,  which  a  nation  ought  to  have  for  each  inhabitant. 
They  say  that  the  amount  of  money  which  a  nation  needs  will 
vary  according  to  the  volume  of  its  commerce,  according  to 
the  rapidity  of  the  circulation  of  goods  and  money;  in  a  word, 
according  to  the  economic  stage  in  which  the  nation  happens 
to  be.  If  a  nation  has  little  trade  it  will  need  only  a  few  in- 
struments of  trade,  and  but  little  money  will  be  required  to 
effect  exchanges.  On  the  other  hand,  if  commerce  is  large, 
exchanges  frequent  and  of  large  amount,  there  must  be  money 
enough  to  meet  the  necessities  of  the  case.  According  to  this 
view,  if  the  economy  of  the  nation  is  developing,  the  volume 
of  its  money  must  grow  and  keep  pace  with  its  economic 
growth.  It  is  a  matter  of  history  that  the  money  of  modern 
nations  constantly  tends  to  augment.  A  village  community, 
living  in  the  stage  of  village  economics,  has  little  use  for  money 


188  DESCRIPTIVE  ECONOMICS. 

and  in  the  primitive  village  community,  as  a  matter  of  fact,  there 
is  no  money  at  all.  Exchanges  are  made  by  bartering,  not 
through  the  medium  of  money.  When  villages  have  grown 
out  of  the  stage  of  village  economics,  and  developed  a  munici- 
pal economy,  with  the  various  economic  classes,  with  manu- 
factures and  commerce,  the  volume  of  money  must  increase 
accordingly.  When  the  cities  become  part  of  a  nation  and  the 
national  stage  of  economics  is  reached,  the  amount  of  money 
must  again  be  increased,  because  all  exchanges  are  now  made 
through  the  medium  of  money.  Wages  are  paid  in  money. 
Domestic  servants  instead  of  receiving  provisions  or  other  com- 
modities for  their  service,  now  receive  money  payments.  If 
piece  work  is  common  instead  of  monthly  service,  payments 
are  necessarily  more  frequent,  and  more  money  is  required. 
In  other  words  it  is  a  change  from  the  barter  economy  of  the 
Middle  Ages,  to  the  money  economy  of  modern  times;  from 
the  feudal  system  to  the  commercial  system.  Eapidity  of  cir- 
culation also,  affects  the  amount  of  money  a  nation  requires. 
For  instance,  the  trade  between  Europe  and  the  United  States 
does  not  depend  wholly  upon  the  number  of  ships  engaged  in 
the  trade,  but  also  upon  the  number  of  trips  which  they  make. 
If  one  dollar  circulates  ten  times  a  year,  it  is  as  good  as  ten 
dollars  circulating  once  a  year.  The  presence  of  law  and  order 
in  the  nation,  or  the  legal  security  of  capital  and  private  prop- 
erty, will  affect  circulation.  Eapidity  of  circulation  is  also 
affected  by  a  lack  of  security  and  confidence,  tending  to  cause 
money  to  be  buried  or  hoarded. 

Credit  Economy  as  a  Factor. — It  has  just  been  said  that, 
in  the  natural  order  of  things,  the  amount  of  money  which  a 
nation  requires  increases  with  its  economic  growth,  and  that 
the  nation  needs  more  money,  per  capita,  than  the  village. 
While  economic  history  shows  this  to  be  true,  yet  we  now  come 
to  a  point  where  it  is  necessary  to  limit  the  statement.  In  the 
last  chapter  there  was  a  discussion  of  modern  credit  economy, 
showing  how  commercial  transactions  are  carried  on  without 
the  use  of  money.  Bearing  in  mind  the  statements  then  made, 
we  see  that  a  nation  practicing  credit  economy  on  a  large  scale 
requires  much  less  money  than  a  nation  which  does  not  use  the 


THE  MONEY  OF  THE  NATTOX.  189 

credit  system.  Among  modern  nations,  therefore,  the  volume 
of  money  does  not  always  augment  so  as  to  correspond  to  the 
economic  growth.  The  amount,  to  be  sure,  does  increase  and 
should  increase,  yet  by  reason  of  the  practice  of  credit  econ- 
omy, the  increase  is  not  in  a  ratio  corresponding  to  economic 
growth.  In  Great  Britain,  the  Bank  of  England  is  the  banker 
of  all  the  other  banks.  It  is  their  common  clearing  house, 
where  debits  and  credits  are  offset.  Checks  and  drafts  from 
all  parts  of  the  United  Kingdom  are  set  off  against  each  other. 
These  checks  and  drafts  take  the  place  of  actual  money  in 
commercial  transactions,  and  the  volume  of  money  needed  is 
so  much  the  less.  If  the  people  of  the  United  States,  for  in- 
stance, could  all  use  a  single  bank,  very  little  money  would  be 
required  for  circulation.  It  is  estimated  that  nine-tenths  of 
the  payments  of  Great  Britain  are  effected  without  the  aid  of 
money.  Checks  and  bills  of  exchange,  which  are  employed 
instead  of  money,  are  sometimes  erroneously  classed  as  paper 
money.  They  are  not  paper  money,  but  rather  money-paper. 
The  Amount  of  Money  Self-Regulating. — As  trade  in- 
creases and  more  sales  are  made,  and  more  money  is  needed 
with  which  to  make  payments,  the  required  amount  seems  to 
find  its  way  into  the  nation  and  into  circulation.  The  demands 
of  trade  cause  it  to  flow  and  reflow  to  meet  trade  exigencies. 
When  gold  is  exported  from  the  United  States  there  is  apt  to 
be  popular  mourning  for  the  wealth  that  is  said  to  be  flying 
away  from  us.  When  it  is  being  imported  there  is  great  pop- 
ular elation.  People  would  not  give  much  attention  to  the 
question  if  they  did  not  entertain  the  erroneous  idea  that  gold 
is  wealth  in  a  sense  in  which  corn  is  not  wealth.  When  gold 
is  coming  into  the  country,  it  is  said  that  the  balance  of  trade 
is  in  our  favor ;  in  other  words,  that  we  are  selling  more  goods 
abroad  than  we  are  buying  there,  and  the  gold  is  coming  to 
pay  the  difference.  If  there  is  any  reasonable  excuse  for  glad- 
ness because  gold  is  being  imported,  it  is  because  of  the  favor- 
able balance  of  trade.  This  presupposes,  however,  that  one  of 
the  conditions  of  national  prosperity  is  a  favorable  balance  of 
trade.  When  we  come  to  discuss  the  balance  of  trade  theory, 
however,  we  shall  see  that  wise  men  hold  it  to  be  no  great 


190  DESCRIPTIVE  ECONOMICS. 

thing,  after  all,  for  a  nation  to  have  a  favorable  balance  of 
trade  ;  that  while  it  is  desirable,  other  things  being  equal,  it  is 
not  the  one  thing  which  ensures  national  prosperity. 

Money  for  Wages. — A  new  criterion  of  the  amount  of 
money  required  by  a  nation  has  recently  been  set  up.  It  does 
not  pretend  to  be  the  crucial  test,  but  simply  one  of  the  mat- 
ters to  be  taken  into  consideration.  It  is  to  the  effect  that 
there  should  be  money  enough  for  the  payment  of  wages  by  the 
day.  In  other  words,  "the  day's  labor  of  an  ordinary  laborer 
should  not  be  inferior  to  the  value  of  a  piece  of  legal  tender 
coin  which  could  be  conveniently  carried.  We  need,  then, 
enough  money,  so  that  the  value  of  a  coin  of  convenient  size 
should  not  exceed  a  day's  wages  of  an  unskilled  laborer."  The 
whole  subject  concerning  the  amount  of  the  money  of  the 
nation  may,  therefore,  be  summed  up  in  this  way :  a  nation 
wants  as  much  money  as  it  has  use  for,  and  no  more. 

Paper  Money. — Up  to  this  point  in  the  chapter  we  may 
have  had  paper  money  in  mind  as  often  as  we  have  had  coin 
in  mind.  Let  us  have  a  clear  conception  of  the  character  of 
paper  money.  In  the  first  place,  it  is  not  money,  but  the  rep- 
resentative or  symbol  of  money.  It  is  sometimes  called  token 
money.  We  call  it  money,  and  it  passes  from  hand  to  hand  as 
money,  because  it  will  buy  our  wants  just  as  much  as  gold  and 
silver.  Let  us  illustrate  its  use.  The  Carthagenians  had  a 
leather  money  made  in  this  way  :  They  took  any  object,  either 
of  wood  or  metal,  the  size  of  the  coin  which  they  proposed  to 
represent,  enclosed  it  in  a  little  leather  sack  or  bag,  and  stamped 
the  leather  with  the  great  seal  of  the  state.  The  object  inside 
of  the  leather  might  be  a  real  piece  of  gold  or  silver,  or  it 
might  be  a  bit  of  iron  or  copper.  No  one  could  tell.  On  the 
outside,  however,  it  was  stamped  as  though  it  contained  a  coin 
of  a  specific  denomination.  This  leather  money  circulated 
from  hand  to  hand  as  readily  as  the  real  money  so  long  as  the 
people  had  confidence  in  the  state. 

Promises  to  Pay. — If  you  take  out  your  purse  now  and 
examine  your  paper  money,  you  find  that  most  of  it  con- 
sists of  promises  to  pay.  The  national  bank  notes  are  prom- 
ises to  pay,  (1,)  by  the  banks  which  issue  them,  (2,)  the  num- 


THE  MONET    OF  THE  NATION.  191 

ber  of  dollars  expressed  upon  their  face,  (3,)  upon  demand. 
In  the  case  of  "  greenbacks,"  you  find  that  they  are  promises 
to  pay  on  the  part  of  the  government.  Promises  to  pay  what  ? 
They  are  promises  to  pay  money,  the  real  money  which  they 
represent.  On  the  treasury  notes  there  is  a  promise  by  the 
government  to  pay  the  bearer  so  many  dollars  in  coin.  If  you 
happen  to  have  a  silver  certificate,  you  will  find  that  to  be 
more  truly  a  representative  of  money,  than  any  of  the  other 
bills.  The  certificate  represents  so  many  dollars  in  coin  on 
deposit  in  the  Treasury  at  Washington,  and  the  holder  of  it  is 
entitled  to  go  there  at  any  time,  present  the  certificate  and  get 
the  coin  money. 

The  Element  of  Confidence. — We  naturally  want  to  know 
how  it  comes  that  this  paper  money,  which  is  not  money  at  all, 
but  merely  a  promise  to  pay  money,  comes  to  circulate  as 
money.  In  the  first  place  it  is  because  we  have  confidence  in 
the  government.  We  believe  that  the  government  will  keep 
its  promises  to  pay.  In  other  words,  the  money  is  redeemable 
in  coin.  In  the  case  of  the  national  bank  notes  we  find,  more- 
over, on  the  face  of  the  note  a  statement  that  the  payment  of 
the  note  is  secured  by  United  States  bonds  deposited  with  the 
Treasurer  of  the  United  States.  We  have  confidence  that  the 
government  will  make  each  bank  keep  on  deposit  sufficient 
bonds  to  redeem  its  various  notes  which  have  been  issued  and 
put  in  circulation.  When  we  get  a  note  of  this  kind  we  do  not 
take  it  to  the  bank  where  it  is  payable,  as  we  would  a  promissory 
note  of  an  individual,  for  payment,  but  we  pass  it  over  to  a 
creditor,  and  so  it  passes  on  from  hand  to  hand  as  long  as  peo- 
ple are  satisfied  that  the  real  money  would  be  forthcoming  if 
the  bills  were  presented.  If  doubt  arises  whether  the  promise 
to  pay  will  be  kept,  then  people  are  loth  to  take  the  paper 
money.  If  they  do  take  it,  they  take  it  at  a  discount  sufficient 
to  offset  the  risk  of  its  being  paid.  When  this  occurs  paper 
money  is  said  to  be  at  a  discount,  and  coin  at  a  premium. 

The  Creation  of  Government. — The  fact  that  paper 
money  answers  all  the  purposes  of  money,  frequently  leads 
people  to  believe  that  money  is  the  creation  of  government, 
and  that  the  government  can  make  as  much  money  as  it  desires 


192  DESCRIPTIVE  ECONOMICS. 

and  put  it  in  circulation.  It  is  a  common  and  popular  error. 
The  fact  is  the  government  can  not  create  money  any  more 
than  it  can  create  corn  and  potatoes.  Suppose  Congress  should 
enact  a  law  like  this  :  "  It  is  hereby  enacted  that  there  shall  be 
6,000  bushels  of  corn  for  the  uses  of  government  and  of  the 
people,"  would  that  produce  the  corn  ?  No.  If  the  govern- 
ment wants  corn  it  must  raise  it  by  hiring  laborers  and  tilling 
land,  just  as  a  farmer  must  raise  it.  Government  can  order 
that  gold  and  silver  shall  be  fashioned  into  pieces  of  specific 
weight  and  fineness  and  of  specific  proportions,  arid  it  can,  if 
it  chooses,  issue  paper  promises  to  pay,  representing  this  real 
money.  That,  however,  is  the  extent  of  its  power.  The 
answer  to  the  fallacy  is  a  repetition  of  what  has  already  been 
said,  to  wit :  the  value  of  money,  the  value  of  a  gold  dollar,  is 
determined  just  as  we  determine  the  value  of  a  pair  of  boots, 
or  of  a  bushel  of  potatoes — it  is  worth  the  labor  expended  in 
its  production.  The  government  may  say  how  many  pounds 
shall  constitute  'a  bushel  of  potatoes.  It  may  say  how  many 
grains  of  gold  or  silver  shall  go  into  a  dollar.  It  cannot  create 
the  value  of  these  grains  of  gold  and  silver.  In  the  early  days 
of  California,  gold  dust  was  the  common  form  of  money. 
Every  merchant  had  a  pair  of  scales  and  weighed  out  for  his 
customers  the  requisite  gold  dust  in  payment  of  purchases. 
Government  saves  us  the  trouble  of  weighing.  It  coins  the 
gold  dust  into  ingots  of  certain  weight  and  fineness.  The 
Government  stamp  is  simply  a  guaranty  of  the  weight  and 
purity  of  each  piece.  The  stamp  adds  nothing  to  the  worth  of 
the  piece. 

Advantages  of  Paper  Money. — Paper  money  is  of  great 
convenience  in  commercial  transactions.  It  is  lighter  than 
coin.  A  man  can  carry  more  in  his  pocket.  The  precious 
metals  are  subject  to  wear  by  use.  They  lose  in  weight  and 
that  is  a  permanent  loss.  Paper  money  can  be  sent  by  mail  or 
transported  by  express  more  cheaply  than  the  precious  metals. 
To  do  business  without  paper  money  would  be  like  trying  to 
do  business  without  the  instruments  of  credit  like  checks  and 
bills  of  exchange. 

Disadvantages   and   Dangers    of  Paper   Money. — The 


THE  MONEY  OF  THE  NATION.  193 

precious  metals  are  actually  worLli  in  other  commodities  what 
it  costs  to  produce  them.  Two  dollars  can  always  be  exchanged 
for  an  umbrella  which  has  cost  two  dollars  worth  of  labor,  but 
a  two-dollar  bill  does- not  by  any  means  constitute  two  dollars' 
worth  of  labor.  The  plate  having  once  been  made,  thousands  of 
dollars  can  be  printed  off  at  the  cost  of  operating  the  printing 
press,  until  the  issue  is  many  times  greater  than  the  cost  of  the 
labor  from  beginning  to  end.  The  danger,  is,  therefore,  that 
too  much  will  be  printed.  It  can  be  made  so  cheaply  that  gov- 
ernment is  sometimes  induced  to  lend  a  willing  ear  to  the  popu- 
lar cry  for  * 'cheap"  money.  The  resillt  is  inflation.  The  paper 
money  falls  below  par.  It  passes  from  hand  to  hand  only  at  a 
discount  and  can  not  be  exchanged  on  even  terms  for  real 
money.  Citizens  lose  faith  in  it,  and  it  soon  drives  out  the  real 
money.  Foreigners  will  not  take  it  because  it  is  not  at  par 
with  the  precious  metals,  and  foreign  commerce  soon  feels  the 
result.  It  drives  out  the  precious  metals  because  creditors  in 
paying  their  debts  will  always  pick  out  the  cheapest  money  to 
pay  with,  provided  debtors  can  be  made,  or  are  compelled  by 
law,  to  receive  it.  In  Persia  once,  there  was  a  law  that  whoever 
refused  to  receive  the  paper  money  of  the  country  was  punish- 
able with  death.  In  other  words,  the  government  printed  the 
paper  and  forced  it  into  circulation.  It  was  a  ^'forced  loan." 
When  wampum  was  current  money  in  New  England,  a  cheap 
grade  of  poor  workmanship  appeared.  Wampum  coinage  was 
debased.  Massachusetts  Bay  Colony  had  to  enact  a  law  estab- 
lishing the  grade  and  fixing  the  value  of  the  different  grades. 
When  the  Connecticut  farmers  could,  according  to  law,  pay 
their  taxes  in  cows,  they  always  picked  out  the  poorest  of  the 
herd  and  the  legislature  had  to  enact  a  law  that  no  "lank  kine 
should  be  received  for  taxes."  These  things  illustrate  Gres- 
ham's  law  which  is  stated  a  little  farther  on. 

The  Volume  of  the  Currency. — Having  admitted  that 
paper  money  is  a  good  thing  and  that  it  facilitates  commerce, 
we  must  admit  that  its  use  is  proper.  The  question  then 
arises,  however,  how  much  of  it  should  be  printed  and  issued? 
llow  much  will  circulate,  and  how  great  an  issue  should  the 
government  authorize  ?  It  is  a  more  difficult  question  evou 
13 


194  DESCRIPTIVE  ECONOMICS. 

than  the  question  relating  to  the  volume  of  money  needed  by 
a  nation.  The  question  is  :  How  much  paper  money  can  be 
safely  printed  ?    These  answers  have  been  proposed  : 

(1)  Not  more  than  can  be  redeemed  in  coin  at  any  time  on 
demand.  Eedeemable  paper  money  is  good.  Irredeemable 
paper  money  is  bad  and  brings  disaster. 

(2)  The  amount  which  can  be  printed  may  depend  some- 
what on  the  amount  of  the  government  revenues.  Laws  au- 
thorizing the  issue  of  paper  money  frequently  provide  that  it 
shall  be  good  in  payment  of  government  dues,  and  such  pay- 
ment is  as  good  as  though  made  in  coin.  The  greater  the 
gross  revenues  of  government,  therefore,  the  greater  the 
amount  of  paper  money  which  can  be  kept  in  circulation. 

(3)  The  amount  which  can  be  printed  will  depend  always  on 
the  amount  of  the  reserve  coin  which  is  kept  ready  to  redeem 
the  paper.  This  involves  the  element  of  confidence  which  we 
have  already  discussed.  Paper  money  will  circulate  in  propor- 
tion as  the  people  have  confidence  in  its  redemption  upon 
demand. 

(4)  Finally,  to  repeat  substantially  what  was  said  under  the 
discussion  of  a  nation's  need  of  money,  no  more  paper  money 
can  be  safely  printed  than  the  country  has  use  for,  considering 
the  state  of  foreign  and  domestic  commerce.  Whatever 
amount  is  required  to  facilitate  exchanges,  large  and  small,  and 
will  be  absorbed  in  trade,  may  be  safely  printed. 

Fluctuation  of  the  Currency. — When  too  much  paper 
money  is  printed,  more  than  will  circulate  without  discount 
and  more  than  is  wanted,  it  is  inflation  of  the  currency.  The 
volume  is  arbitrarily  and  unnaturally  inflated.  Contraction  is 
the  opposite  of  inflation.  In  the  case  of  contraction  of  the 
currency,  there  is  too  little  to  meet  the  demands  of  trade.  In 
practice,  the  terms  inflation  and  contraction  are  applied  to 
the  arbitrary  action  of  the  government  in  issuing  or  with- 
drawing paper  money  from  circulation.  Both  are  equally  bad. 
The  economics  of  a  nation  can  not  be  suddenly  changed  in 
this  direction.  Economic  habits  are  not  formed  by  arbitrary 
laws.  They  grow.  When  a  people  have  become  accustomed 
to  transacting  their  affairs  in  certain  channels  and  upon  a  cer- 


THE  MONEY  OF  THE  NATION.  196 

tain  basis,  a  sudden  change  is  apt  to  be  disastrous.  When  for 
years  a  bushel  of  wheat  has  been  worth  about  a  dollar,  and 
subject  to  rise  and  fall  in  price  only  as  the  crop  is  large  or 
small,  the  over-issue  or  inflation  of  the  currency,  making 
wheat  worth  two  dollars  a  bushel,  disturbs  the  economic  life. 
Neither  the  buyers  nor  sellers  can  suddenly  adapt  themselves  to 
the  change.  Moreover,  under  our  present  system  of  credit 
economy,  obligations  and  debts  are  contracted  to  be  paid  at 
future  times.  Inflation  and  contraction  disturbs  the  nature  of 
these  obligations.  Creditors  demand  that  a  debt  to  be  paid 
them  in  three  months  shall  be  paid  in  money  that  will  buy  as 
much  wheat  as  at  the  time  the  debt  is  contracted.  They  must 
know  that  bonds,  mortgages  and  promissory  notes  will  be  of 
the  same  exchangeable  value  at  maturity  as  at  the  time  they 
are  received. 

Convertible  Bank  Notes. — The  paper  money  thus  far  re- 
ferred to  is  that  known  as  convertible.  It  is  convertible  into 
coin.  It  is  "redeemable,"  because  it  must  be  redeemed  in  coin 
upon  demand  by  the  holder.  It  represents  coin,  and  we  call 
it  the  representative  of  money.  Token  money  is  the  phrase 
sometimes  used.  It  can  be  converted  into  coin  at  the  plea- 
sure of  the  holder,  that  is,  on  demand.  In  order  that  it 
may  be  perfectly  clear  that  bank  notes  are  not  money,  let 
us  illustrate  further.  You  have  a  house  and  lot.  It  has 
value  in  exchange.  You  can  exchange  it  for  other  commodi- 
ties, for  flour,  for  horses,  for  stocks.  But  you  have  also  a 
deed  of  the  house  and  lot.  You  cannot  exchange  the  deed  for 
other  commodities.  In  exchange  for  provisions,  it  is  worth  no 
more  than  the  paper  upon  which  it  is  written,  unless  it  carries 
the  house  and  lot  with  it.  It  is  the  house  and  lot  which  has 
value,  not  the  deed.  A  story  is  told  of  an  Irish  banker  who 
was  very  unpopular  with  the  people.  A  riotous  mob  gathered 
together  all  of  the  bank  notes  issued  by  his  bank  which  could 
be  secured.  The  mob  thought  it  a  fine  time  to  ruin  the  banker. 
A  bonfire  was  made  and  the  bank  notes  went  up  in  smoke. 
The  people  danced  gleefully  about  the  fire,  because,  in  their 
minds,  it  betokened  the  banker's  ruin.  Instead  of  ruining  him, 
they  were  doing  him  the  greatest  possible  service.     They  de- 


196  DESCRIPTIVE  ECONOMICS. 

stroyed  not  his  money,  but  his  promises  to  pay.  They  put  it 
out  of  the  power  of  the  holders  of  his  bank  notes  to  demand 
money  from  him. 

The  one  Function  of  Paper  Money. — Paper  money  per- 
forms only  one  function  of  money.  It  acts  as  a  medium  of 
exchange,  and  that  is  all.  It  is  not  a  measure  of  value,  or  a 
standard  of  value,  or  a  store  of  value.  It  performs  only  one 
of  the  four  functions  of  money. 

Inconvertible  Paper  Money. — A  distinction  is  to  be  drawn 
between  the  convertible  paper  money  which  we  have  been  study- 
ing, and  another  class  of  paper  money  which  is  inconvertible. 
That  is,  it  is  not  convertible  into  coin,  nor  does  any  one  promise 
to  redeem  it  in  coin.  Convertible  paper  money  may  be  issued 
by  bankers  or  by  government.  The  term  "  bank  note  "  is  fre- 
quently applied  indiscriminately,  to  both  bank  money  and 
government  money.  It  is  a  loose  way  of  speaking.  Bank  notes 
are  paper  money  issued  by  banks.  Paper  money  issued  by 
government  is  composed  of  government  notes.  We  must  make 
the  distinction  now  in  order  to  distinguish  convertible  and  in- 
convertible money.  Inconvertible  money  is  issued  by  govern- 
ment only.  It  would  not  be  possible  for  bankers  to  get  into 
circulation  their  individual  notes,  which  are  not  promises  to 
pay  money  on  demand.  Governments  can  do  this  to  a  limited 
extent.  Even  the  government  can  not  get  the  people  to  take 
and  use  as  money,  more  than  a  very  limited  quantity  of  its  prom- 
ises to  pay  which  name  no  day  of  payment,  and  do  not  promise 
to  pay  money.  They  can  not  be  collected  by  suit  at  law,  and 
are  payable  simply  at  the  will  of  government.  Such  currency 
is  usually  issued  only  under  the  stress  of  war,  or  to  meet  sudden 
financial  embarassments,  when  the  ordinary  revenues  are  in- 
sufficient and  money  can  not  be  raised  quickly  enough  by  the 
usual  methods.  Inconvertible  notes  are  debts  contracted  on 
the  understanding  that  they  are  to  be  settled  when  the  nation's 
finances  will  permit.  Confidence  that  the  government  will  at 
some  time  pay  its  debts,  is  the  only  basis  for  their  value.  When 
that  confidence  is  lacking  they  will  not  circulate  at  all.  Incon- 
vertible notes  are  ''  pure  credit"  money. 

Who  Should  Issue  Paper  Money. — There  are  two  sides  to 


THE  MONEY  OF  THE   NATIOX.  197 

this  question.  On  one  hand  it  is  cluimed  that  only  the  govern- 
ment should  issue  paper  money.  On  the  other  hand  it  is  said 
that  private  bankers  should  be  allowed  to  issue  it  subject  to  the 
control  and  regulation  of  government.  It  was  just  said  that 
government  only  can  issue  inconvertible  notes.  In  the  United 
States  both  government  and  the  national  banks  issue  converti- 
ble notes.  The  banks  are  subject  to  the  control  of  government, 
however,  and  are  regulated,  so  far  as  their  right  to  issue  money 
goes,  by  national  laws,  The  government  is,  to  a  certain  extent, 
sponsor  for  their  notes,  by  comx)elling  them  to  buy  government 
bonds  to  secure  the  notes  which  they  issue.  Everyone  agrees 
that  whoever  may  issue  paper  money,  it  should  be  issued  so  as  to 
best  secure  its  redemption.  It  is  argued  that  government,  of 
the  kind  existing  in  the  United  States,  is  not  best  calculated  to 
to  secure  the  redemption  of  paper  money  for  several  reasons  : 
(1),  government  policy  is  likely  to  be  dictated  by  party  politics; 
(2),  the  government  can  not  be  compelled  to  pay  its  debts,  be- 
cause it  can  not  be  sued;  (3),  government  policy  is  likely  to  be 
changed  from  time  to  time  as  various  political  parties  prevail. 
The  change  in  the  financial  policy  of  the  government  which  has 
taken  place  while  this  book  is  in  preparation  (April  1893), 
illustrates  the  force  of  the  last  argument. 

For  many  years  it  has  been  the  policy  of  previous  adminis- 
trations to  keep  in  the  treasury  of  the  United  States,  a  certain 
amount  of  gold  as  a  reserve  for  the  redemption  and  security  of 
the  outstanding  paper  money.  This  policy  has  been  changed 
and  the  gold  reserve  is  treated. as  so  much  cash  in  the  treasury 
with  which  to  pay  all  demands  whether  upon  notes  or  other- 
wise. For  these  various  reasons  it  has  been  urged  that  private 
bankers  alone  should  be  authorized  to  issue  paper  money  sub- 
ject to  government  control. 

Convertible  Notes  Self-Regulating. — In  the  early  part  of 
this  chapter  it  was  stated  that  the  volume  of  a  nation's  money 
is  self-regulating.  That  is  to  say,  the  amount  in  circulation 
will  depend  upon  the  demands  of  trade,  and  a  country  will 
naturally  have  as  much  money  as  it  has  use  for.  If  there  is  a 
deficiency,  the  demand  thus  created  will  be  supplied  from  other 
countries.     The  same  thing  is  true  of  convertible  paper  money. 


198  DESCRIPTIVE  ECONOMICS. 

Its  issue  is  self-regulating.  No  more  will  circulate  than  is 
wanted,  and  no  more  tiian  is  for  the  interests  of  government  or 
the  banks  to  issue.  If  more  is  issued  than  is  needed  or  wanted, 
the  people  who  do  not  want  it,  will  take  it  to  the  banks  or  the 
treasury  and  exchange  it  for  coin.  Neither  the  government  nor 
the  banks  would  be  benefited  therefore  by  the  overissue.  The 
term  "inflation"  is  frequently  applied  to  the  overissue  of  any 
kind  of  paper  money.  It  should  properly  be  used  only  in  con- 
nection with  the  overissue  of  inconvertible  paper  money.  It 
does  not  pertain  to  the  overissue  of  convertible  paper  money, 
because  that  can  not  be  overissued.  No  law  or  power  can  force 
into  circulation  more  paper  money  than  is  wanted  so  long  as 
that  money  is  redeemable  in  gold.  Governments  cannot  do  it, 
nor  can  the  banks  do  it. 

Inconvertible  Notes  not  Self-Regulating. — With  incon- 
vertible paper  money  the  case  is  different.  Inconvertible  notes 
once  issued  stay  issued.  When  the  issue  becomes  greater  than 
is  wanted,  the  holders  can  not  take  the  notes  and  exchange  them 
for  money.  Each  issue  is  cumulative,  like  lead  poisoning. 
Paper  money  of  this  kind  must  therefore  be  kept  well  within 
the  requirements  of  trade.  Overissue  of  it  constitutes  genuine 
inflation,  and  the  moment  the  proper  limit  is  overreached  it 
begins  to  depreciate.  With  every  overissue  the  whole  volume 
loses  its  purchasing  power. 

The  Silver  Question. — So  far  throughout  this  chapter, 
little  distinction  has  been  made  between  gold  and  silver  as 
money.  Both  have  been  referred  to  as  possessing  the  natural 
qualities  fitting  them  to  perform  all  the  functions  of  money. 
Both  are  designated  as  precious  metals.  Both  are  coined  and 
governments  determine  the  ratio  of  value  between  them.  The 
time  has  now  come,  however,  when  we  must  discuss  their 
relations.  It  is  the  *' silver  question"  which  has  for  many 
years  been  a  problem,  both  political  and  economic,  in  the 
United  States.  The  question  may  have  seemed  somewhat  per- 
plexing. That  is  no  reason,  however,  why  we  should  give  it 
up.  The  whole  matter  is  very  simple  when  once  a  few  leading 
principles  of  money  coinage  are  clearly  understood.  We  must 
commence  right,  however,   and  not  shut  our  eyes  to  good 


THE  MONEY  OF  TllE  NATION.  199 

economics.  The  air  of  perplexity  which  hangs  around  the 
question  has  frequently  been  fostered  by  the  specious  argu- 
ments, on  the  one  hand,  of  people  who  have  stock  in  gold 
mines  or  w'ho  have  debts  owing  them  and  want  to  advance  the 
interest  of  gold  as  money,  and  on  the  other  hand,  of  people 
who  have  stock  in  silver  mines  and  would  like  to  see  silver  go 
higher,  which  is  the  result  the  more  it  is  used  as  money. 

Bi-metallism,  means  the  use  of  both  gold  and  silver  for  the 
purposes  of  money  and  as  a  standard  of  value.  Monometallism 
consists  of  using  only  one  of  the  metals  as  a  standard  of  value. 
If  the  two  metals  were  of  equal  value,  that  is,  if  they  were 
equally  distributed  throughout  the  world  and  the  cost  of  min- 
ing them  was  the  same,  the  question  would  be  solved  for  us. 
Silver  is  more  widely  distributed  than  gold.  It  not  only 
occurs  more  frequently,  but  where  it  does  occur,  it  is  fre- 
quently found  in  larger  deposits.  More  of  it  is  mined  than 
of  gold.  The  cost  of  mining  it  is  less  than  the  cost  of  mining 
gold.  It  is  necessary,  therefore,  for  government  to  fix  a  ratio 
of  value  between  silver  and  gold,  if  both  are  to  be  used  as 
money.  Government  does  not  create  the  value  of  either  of 
them.  It  simply  determines  how  many  grains  shall  constitute 
a  dollar,  just  as  it  determines  how  many  pounds  of  wheat  shall 
make  a  bushel.  Bi-metallism  is  also  known  as  the  double 
standard,  because  it  involves  the  use  of  the  two  metals  as  a 
standard  of  value.     Monometallism  is  the  single  standard. 

Fixing  the  Ratio. — Before  going  any  deeper  into  the 
subject,  let  us  see  if  we  understand  what  is  meant  by  **  ratio,'* 
as  applied  to  gold  and  silver  coinage.  For  the  sake  of  illustra- 
tion, we  will  suppose  that  a  nation  decides  to  have  a  unit  of 
coinage  to  be  called  a  dollar,  the  standard  to  be  monometallic 
with  gold  as  a  basis.  It  determines  how  many  grains  of  gold 
shall  constitute  that  dollar.  It  may  fix  upon  any  number  of 
grains  at  random.  If  it  decides  that  ten  grains  shall  be  the 
amount,  then  the  gold  dollar  will  exchange  in  the  market  for 
ten  grains  worth  of  corn  or  potatoes  or  labor.  If  it  is  deter- 
mined that  the  dollar  shall  contain  one  hundred  grains  of  gold, 
then  it  will  buy  ten  times  as  much  corn  or  potatoes.  We  will 
suppose  the  government  finally  decides  that  25.8  grains,  9-10 


200  DESCRIPTIVE  ECONOMICS. 

fine,  shall  be  the  amount  to  go  into  a  dollar.  Kow  it  becomes 
necessary  to  say  how  many  grains  of  silver  shall  constitute  a 
dollar.  It  is  a  little  more  than  that,  however.  The  real 
question  to  be  determined  is,  how  many  grains  of  silver  shall 
be  equal  to  25.8  grains  of  gold,  both  being  of  equal  fineness? 
After  much  calculation  suppose  it  appears  that  412^  grains  of 
silver  are  just  as  valuable  as  25.8  grains  of  gold.  In.  other 
words,  either  will  exchange  for  the  same  quantity  of  other 
commodities,  the  fineness  being  the  same.  The  government 
directs  that  412|-  grains  of  silver  shall  make  a  dollar,  and  shall 
be  equal  to  a  gold  dollar,  and  thus  the  ratio  is  established. 
The  coinage  of  the  United  States  has  been  in  these  proportions 
for  many  years.  The  silver  dollar,  coined  as  above,  is  what  is 
known  as  "  the  dollar  of  our  fathers." 

Fluctuating  Ratio. — It  is  one  thing,  however,  for  govern- 
ment to  establish  a  ratio  value  between  the  two  metals  and 
quite  another  thing  to  maintain  it.  Fluctuation  in  the  values 
of  the  metals  might  be  expected.  The  value  of  wheat  fluctuates 
from  year  to  year,  in  proportion  as  the  aggregate  crop  of  the 
world  is  greater  or  less  than  the  normal.  There  have  been 
periodical  fluctuations  in  the  relative  values  of  gold  and  silver, 
owing  to  differences  in  the  several  quantities  produced.  There 
are  eras  of  silver  production,  when  silver  has  been  mined  in 
extraordinarily  large  quantities.  Again  there  have  been 
periods  when  the  quantity  of  silver  mined  has  fallen  off  and 
the  production  of  gold  has  increased.  These  periods  seem  to 
follow  each  other,  and  it  is  seldom  that  great  gold  production 
has  coincided  with  great  silver  production.  In  1794  the 
Federal  Congress  provided  for  the  coinage  of  a  silver  dollar  to 
contain  416  grains  of  coin  silver.  This  is  equal  to  371.25 
grains  of  pure  silver.  It  had  solved  the  easy  part  of  the 
problem  by  arbitrarily  fixing  upon  the  number  of  grains  of 
silver  to  be  put  into  the  dollar.  It  then  came  to  the  hard  part 
of  the  problem,  that  is,  to  find  how  much  gold  should  be  equal 
to  416  grains  of  silver,  the  fineness  being  the  same.  The 
wisest  financiers  were  employed.  It  was  finally  reported  to 
Congress  that  gold  was  worth  about  fifteen  times  as  much  as 
silver,  and  Congress  therefore  established  a  gold  dollar  contain- 


THE  MONEY  OF  THE  NATION.  201 

ing  one-fifteenth  as  many  grains  of  pure  gold  as  the  silver  con- 
tained grains  of  pure  silver.  This  caused  the  gold  dollar  to 
contain  'ZL'lb  grains  of  pure  gold.  In  other  words,  Congress 
determined  that  24. 75  grains  of  pure  gold  should  be  equal  to 
416  grains  of  pure  silver.  It  was  soon  discovered,  however 
that  a  mistake  had  been  made.  It  was  supposed  that  Congress 
had  made  the  mistake,  but  as  a  matter  of  fact,  the  relative 
value  of  the  two  metals  changed  and  it  came  to  pass  that  the 
silver  dollar  was  not  worth  as  much  as  the  gold-dollar.  In  1834 
Congress  tried  to  remedy  the  matter  by  putting  only  23,2 
grains  of  pure  gold  into  the  dollar.  This  made  the  ratio  1  to 
16.  It  did  not  help  matters  much,  because  in  a  short  time  the 
gold  dollar  was  found  to  be  worth  less  than  the  silver  dollar. 
The  foregoing  facts  with  reference  to  United  States  coinage  are 
stated  upon  the  authority  of  Graham  Macadam,  and  his  excel- 
lent treatise,  An  Alphabet  of  Finance,  is  recommended  as  a 
source  of  additional  information. 

The  European  Ratio. — France  was  one  of  the  first  nations 
to  fix  the  European  ratio  between  gold  and  silver.  In  1803  a 
law  was  enacted  in  that  country  declaring  that  every  debtor 
should  have  the  right  to  pay  his  obligations  in  gold  coins,  or  in 
silver  coins  containing  15^  times  the  quantity  of  silver.  The 
ratio  was  fixed  at  15^  to  1.  Spain,  Italy,  Switzerland  and  Bel- 
gium afterwards  agreed  upon  the  same  ratio,  and  they  joined 
with  France  to  form  the  Latin  Monetary  Union.  The  nations 
composing  the  union  entered  into  a  compact  to  maintain  the 
ratio  between  gold  and  silver  at  15^  to  1.  For  about  seventy 
years  this  ratio  was  maintained  by  the  combined  action  of  these 
countries,  and  it  has  come  to  be  known  as  the  European  ratio. 
It  is  also  referred  to  as  the  customary  ratio.  The  ratio  of  16  to 
1  is  known  as  the  United  States  ratio. 

Fineness  in  Coinage. — Coins  in  daily  use  are  subject  to 
abrasion.  They  should  have  the  highest  possible  wearing 
quality.  It  is  found  that  an  alloy  will  answer  this  and  other 
requirements  of  coinage  better  than  the  pure  metal.  It  is  usu- 
al, therefore,  to  combine  some  copper  with  the  fine  gold  and 
silver.  The  gold  and  silver  coins  of  France,  Germany,  Spain, 
Italy,  Belgium,  the  United  States  and  of  nearly  all  the  modern 


202  DESCRIPTIVE  ECONOMICS. 

nations  contain  one  part  of  copper  to  nine  parts  of  pure  gold  or 
silver.  A  coin  nine-tenths  fine,  therefore,  or  one  which  con- 
tains nine  parts  of  pure  metal  and  one  of  copper,  is  of  the 
standard  fineness. 

EflPect  of  DiflPerence  In  Values. — There  is  a  well  known 
monetary  law,  known  as  Gresham's  law,  because  it  was  formu- 
lated by  Sir  Thomas  Gresham  about  three  centuries  ago.  As 
applied  to  money  circulation  it  reads  thus:  **A  superior  and  an 
inferior  money  cannot  circulate  together.  The  inferior  will 
drive  out  the  superior."  Bearing  this  in  mind,  let  us  observe 
the  effect  when  the  ratio  which  has  been  established  by  govern- 
ment is  disturbed  by  the  rise  or  fall  of  either  of  the  metals. 
As  long  as  the  parity  is  maintained,  the  coins  of  the  two 
metals  circulate  indiscriminately  and  there  is  an  equilibrium 
of  coinage.  But  suppose  there  comes  a  period  of  extraordinary 
activity  in  silver  mining  when  extraordinarily  large  quantities 
of  silver  are  put  upon  the  market.  The  price  of  silver,  relative 
to  gold,  falls,  and  the  ratio  is  broken.  The  silver  dollar  is  no 
longer  worth  as  much  as  the  gold  dollar.  Every  debtor,  how- 
ever, prefers  to  pay  his  obligations  in  the  cheapest  money,  in 
coins  of  the  cheaper  metal,  and  so  silver  drives  gold  out.  We 
can  apply  here  the  illustration  which  was  given  in  the  earlier 
part  of  the  chapter,  of  the  Connecticut  tax  payers  paying  taxes 
in  *'lank  kine."  Gold  is  either  melted  or  sent  abroad  to  buy 
foreign  commodities.  When  silver  rises  above  gold,  then  gold 
becomes  the  medium  of  payment.  The  dollar  of  the  lower 
value  is  always  the  money  in  circulation,  and  hence,  the 
practical  standard  of  value.  Advocates  of  bi-metallism  or  of 
the  double  standard,  profess  to  find  in  the  fluctuation  between 
the  relative  values  of  the  metals,  an  argument  in  favor  of  their 
theory.  They  say,  that  if  both  metals  are  used  as  money  in  the 
shape  of  a  double  standard,  although  both  are  liable  to  fluctua- 
tions in  value,  yet  if  either  may  be  offered  in  liquidation  of 
debts,  the  one  will  always  be  chosen  which  is  the  lower  in 
value,  with  the  result  of  correcting  the  difference.  In  other 
words:  "With  every  fluctuation  in  the  relative  values  of  the 
metals,  the  function  of  money  falls  upon  the  lower  metal,  the 


THE  MONET  OF  THE  NATION.  203 

other  metal  flying  away;  but  if  a  lower  metal  comes  in 
greater  demand,  it  must  rise  in  value,  hence  the  tendency  is  to 
a  continual  return  to  the  balance."  The  aim  of  this  argument 
is  to  show  that  bi-metallism  is  self-regulating. 

Free  Coinage. — Bi-metallism  involves  something  more 
than  the  mere  setting  up  of  a  double  standard.  It  means  that 
the  nation  employing  it  must  coin  all  the  gold  and  silver 
which  anybody  desires  to  have  coined.  The  mints  of  the 
nation  must  be  open  to  all  owners  of  gold  and  silver  bullion. 
They  are  entitled  to  have  it  coined  at  the  ratio  fixed  by  govern- 
ment. This  is  free  coinage.  Those  who  oppose  bi-metallism 
claim  that  the  free  coinage  system  is  not  practicable  unless 
adopted  by  all  nations,  because  the  countries  which  do  not 
adopt  it  will  send  their  silver  where  coinage  is  free  and  take 
away  gold  instead. 

International  Bi-metallism. — Those  who  maintain  that 
bi-metallism  can  be  successfully  and  permanently  introduced, 
have  been  gradually  increasing  in  number  for  some  years  past. 
They  are  still  in  a  minority,  however.  Mono-metallism,  with 
gold  as  the  basis,  such  as  has  been  practiced  in  the  United 
States  and  Germany,  is  the  favorite  system.  If,  however,  the 
United  States,  together  with  the  principal  nations  of  Europe, 
could  agree  upon  a  bi-metallic  system,  and  thus  inaugurate  in- 
ternational bi-metallism,  there  are  indications  that  it  would  be 
successful.  The  necessity  of  coining  the  silver  of  other 
countries,  and  the  consequent  loss  of  gold,  which  is  the  bugbear 
of  free  coinage,  would  not  then  exist. 

The  Functions  of  a  Bank. — There  is  a  common-place 
error  which  sets  a  bank  down  as  an  institution  for  receiving 
the  money  of  the  people  and  storing  it  in  vaults  for  safe  keep- 
ing. If  such  were  the  case  there  would  be  no  banks,  because 
no  bank  could  live  if  it  kept  the  money  of  its  depositors  lying 
idle  in  its  vaults.  There  are  safe  deposit  companies  which 
have  vaults  for  the  safe-keeping  of  money  and  valuables,  but 
the  owner  has  to  pay  for  all  the  privileges  he  gets  there.  A 
bank  must  loan  out  its  deposits  and  keep  the  money  in 
circulation,  and,  therefore,  the  *' strongest"  bank  in  the  world 
would  fail,  if  all  its  depositors  demanded  their  money  at  the 
same  time. 


204  DESCRIPTIVE  ECONOMICS. 

Savings  Banks,  so  popular  in  the  United  States,  are  not 
known  in  many  countries.  A  savings  bank  may  receive  deposits 
of  money  for  safe  keeping,  but  not  with  the  intention  of  storing 
them.  The  depositor  receives  interest  upon  his  deposit.  If 
the  bank  puts  the  deposit  away  in  a  vault,  how  can  it  afEord  to 
pay  interest?  It  receives  the  deposit  only  to  loan  it  out  again 
at  a  higher  rate  of  interest  than  it  pays  the  depositor.  It  pro- 
ceeds on  this  theory  and  it  expects  that  the  average  depositor 
will  allow  his  deposit  to  remain  for  a  certain  length  of  time  be- 
fore calling  for  it.  It  can  safely  loan  out  a  large  proportion 
of  its  deposits  relying  upon  this  expectation.  When  there  are 
a  large  numbers  of  depositors  the  bank  will  at  all  times  have  a 
large  amount  of  money  in  its  keeping  waiting  to  be  called  for. 
While  savings  banks  are  corporations,  regulated  and  chartered 
under  State  laws,  in  their  relations  to  depositors,  they  are 
theoretically  nothiiig  more  than  firms  or  individuals  receiving 
money  in  trust  and  for  safe  keeping,  to  be  returned  on  demand. 
Their  control  by  the  State  creates  the  confidence  in  their  ability 
to  repay,  which  private  individuals  could  not  command.  The 
first  London  bankers  were  private  individuals  performing  the 
functions  of  savings  banks.  In  those  times  law  and  order 
were  not  universally  prevalent.  Thieving  and  armed  robbery 
were  common.  The  Lombard  street  merchants  were  mostly 
jewelers  who  had  strongly  fortified  places  of  business  and 
maintained  armed  guards.  People  who  had  no  such  places  of 
security  were  wont  to  take  their  valuables  there  for  safe  keep- 
ing. The  goldsmiths  gave  receipts  for  the  property  deposited, 
whether  of  money  or  valuables.  These  receipts  finally  became 
negotiable  by  endorsement.  They  were  the  forerunner  of  the 
bank  note  of  our  day. 

Banks  of  Deposit,  or  discount  banks,  as  they  are  some- 
times called,  are  distinguished  from  savings  banks  chiefly  by 
the  fact  that  they  allow  no  interest  on  general  deposits  subject 
to  check.  They  are  called  discount  banks  because  they  buy  or 
discount  commercial  paper,  a  proceeding  which  savings  banks 
are  not  usually  allowed  to  do,  by  law.  These  banks  receive  very 
little  money.  Instead  of  money,  they  receive  checks,  promis- 
sory notes,  bills  of  exchange  and  warehouse  receipts.    They  re- 


THE  MONET  OF  THE  NATION.  205 

ceive  evidences  of  debt,  titles  to  money,  and  claims  upon  other 
banks  and  other  people.  Sir  John  Lubbock,  who  was  con- 
nected with  a  London  bank,  made  a  computation  of  the 
amount  of  money  and  of  the  amount  of  commercial  paper 
actually  paid  into  the  bank  during  a  given  time.  He  found 
that  out  of  a  total  sum  of  nineteen  million  pounds,  paid  into 
the  bank,  only  one-half  of  one  per  cent,  was  in  coin,  and  there 
was  only  three  per  cent,  of  coin  and  bank  notes  together. 
Ninety-seven  per  cent,  was  composed  of  checks,  bills  and 
various  forms  of  commercial  paper.  The  function  of  the  bank 
is  not  simply  the  collection  of  this  paper  by  presenting  it  to 
the  debtor,  receiving  the  money  and  returning  it  to  the 
creditor.  A  bank  is  not  a  collector.  In  fact,  banks  do  not 
care  to  receive  money.  They  prefer  to  receive  good  com- 
mercial paper,  because  experience  tells  them  that  the  money 
due  from  them,  upon  the  paper,  will  not  be  called  for  by  their 
customers  for  some  time.  Until  it  is  called  for  they  may  loan 
it  to  others  for  a  consideration  in  the  shape  of  interest.  They 
do  not  know  how  long  any  particular  customer  will  leave  his 
account  with  them,  but  experience  has  demonstrated  the  gen- 
eral average,  and  therefore  they  know  the  percentage  of 
deposits  which  they  can  safely  loan.  A  large  portion  of  the  busi- 
ness of  a  modern  bank  and  a  most  profitable  part  of  the  business, 
is  the  discounting  of  promissory  notes.  A  customer  of  the 
bank  receives  from  a  debtor  a  promissory  note  payable  in  three 
months,  we  will  say.  The  customer  has  immediate  use  for  the 
amount  of  the  note.  He  takes  it  to  his  bank  where  the  amount 
of  the  note  is  placed  to  his  credit,  or  paid  to  him,  less  a  certain 
percentage  which  is  agreed  upon  as  discount.  The  bank 
makes  by  the  transaction,  the  amount  of  this  discount.  In 
this  way  it  has  loaned  the  money  of  its  depositors. 

The  Clearing  House. — In  the  course  of  a  day's  business  a 
bank  receives  many  checks  and  drafts  on  the  various  other  banks 
in  the  same  city,  and  upon  other  banks  in  different  parts  of  the 
country.  It  pays  to  its  customers  or  credits  them  with  the 
amounts  of  these  checks  and  drafts.  It  is  bound  to  present 
them  at  the  place  of  payment  and  get  the  money  due  on  them. 
There  was  a  time  when  it  would  send  a  messenger  or  oflBcer, 


306  DESCRIPTIVE  ECONOMICS. 

daily,  to  each  of  the  other  banks  in  the  city  with  its  checks  and 
drafts  for  collection.  In  the  smaller  towns  that  practice  may 
still  be  followed.  The  larger  cities  have  a  clearing  house.  It 
is  an  institution  under  the  management  of  all  the  banks  of  the 
city — all  having  a  voice  in  the  choice  of  manager.  A  room  is 
secured  for  the  common  business,  and  each  bank  has  a  repre- 
sentative there.  The  representative  receives  from  his  bank  all 
the  paper  which  has  come  in  during  the  previous  business 
day.  He  presents  to  the  representatives  of  the  other  banks  the 
checks  which  he  holds  against  them.  To  illustrate,  the  Bank 
of  Columbia  has  checks  and  drafts  aggregating  $10,000  against 
the  Empire  Bank;  but  the  Empire  Bank  has  checks  and  drafts 
against  the  Bank  of  Columbia  aggregating  $9,000.  The 
Empire  Bank,  therefore,  owes  tlfe  Bank  of  Columbia  $1,000. 
The  Bank  of  Columbia  receives  a  ticket  from  the  clearing 
house  manager  certifying  to  this  fact.  This  ticket  may  be 
passed  into  the  assets  of  the  Bank  of  Columbia  as  so  much 
cash,  or  it  may  be  paid  in  cash  by  the  Empire  Bank.  Without 
the  aid  of  the  clearing  house  it  would  have  been  necessary  for 
an  officer  of  the  Empire  Bank  to  go  to  the  Bank  of  Columbia 
and  draw  $9,000.  An  officer  of  the  Bank  of  Columbia  must 
have  gone  to  the  Empire  Bank  to  get  $10,000.  By  using 
the  clearing  house,  the  difference  of  $1,000,  only,  is  handled  in 
cash.  The  clearing  house  then  is  simply  an  institution  by 
which  the  banks  adjust  the  accounts  between  themselves. 
They  pay  each  other  merely  the  difference  of  their  accounts, 
and  thus  avoid  the  labor  of  handling  the  actual  amounts  to 
which  they  are  entitled  from  each  other. 


PART   V. 

II^^TEEJ^ATIONAL  EOOISTOMICS. 


CHAPTEK  I. 
INTERNATIONAL    COMMERCE. 

Introductory. — It  is  now  the  formative  period  of  Interna- 
tional Economics.  The  statement  previously  made,  that  much 
economic  knowledge  remains  to  be  made  definite  and  certain, 
applies  with  peculiar  force  to  the  department  of  international 
economics.  The  nations  of  the  earth,  are  slowly  feeling  the 
way  to  a  world  economy,  concerning  which  something  may 
subsequently  be  said.  Before  it  can  be  reached,  some  differ- 
entiation of  the  national  economy  will  be  required.  It  might 
be  profitable  to  speculate  as  to  the  forms  which  this  differen- 
tiation may  assume,  but  we  are  dealing  with  descriptive  eco- 
nomics, and  therefore,  will  pass  on  to  the  statement  of  the  best 
known  and  more  important  facts  of  international  economics  — 
those  which  we  know  relate  to  international  economy,  although 
the  precise  relationship  may  yet  be  undetermined,  owing  to  the 
undeveloped  condition  of  this  branch  of  economic  science. 

Commerce  between  Nations,  is  the  foremost  subject  of 
international  economics.  The  word  commerce,  in  this  connec- 
tion, is  used  as  conveying  not  only  the  usual  and  ordinary  mean- 
ing, (1)  the  interchange  of  goods  and  productions,  by  barter  or 
sale  and  purchase,  but  also  (2)  international  intercourse  and 
dealings.  We  first  take  up  the  subject  as  expressed  in  the  first 
meaning,  that  is,  the  international  exchange  of  goods.  The 
subjects  connected  with  the  second  meaning,  will  then  be  dis- 
cussed.    International  trade,  is  not  merely  the  foremost  subject 

207 


208  DESCRIPTIVE  ECONOMICS. 

of  international  economics,  it  is  one  of  the  important  subjects 
connected  with  all  economic  discussion.  As  Professor  Gide 
says: —  "There  is  no  subject  in  political  economy,  hardly,  per- 
haps, in  any  sphere,  which  has  stirred  up  more  controversies, 
caused  the  writing  of  more  volumes,  nay,  even  occasioned  the 
firing  of  more  cannon  balls." 

The  Evolution  of  Commerce. — The  steps  in  the  develop- 
ment of  commerce,  have  been  stated  from  time  to  time  during 
the  progress  of  the  work.  The  chapter  entitled  "  The  Trader," 
contains  in  particular,  an  outline  of  the  growth  of  commerce. 
It  commences  with  the  barter,  by  the  economic  family,  of  a 
surplus  arising  from  good  fortune  in  the  chase,  and  extends 
through  barter  in  ornaments  to  the  exchange  of  raw  products 
between  villages.  In  the  city  stage  of  economics,  it  first  as- 
sumes the  character  of  a  stated  interchange  of  products,  both  in 
the  raw  and  manufactured  state,  and  a  surplus  is  then  sought  to 
be  created  for  the  purposes  of  the  interchange.  Barter  breaks 
up  into  sale  and  purchase.  Commerce  is  intermunicipal,  how- 
ever. The  city  is  the  market.  In  the  present  economic  stage, 
the  market  is: 

A  World  Market. — The  demand  of  the  whole  world  fixes 
the  supply  and  the  price.  The  farmer  grows  wheat  for  the  world 
market;  the  shoe  manufacturer  makes  shoes  for  the  world  mar- 
ket, not  for  the  market  of  Lynn  or  Rochester;  the  merchant 
buys  and  sells  in  the  world  market.  There  is  no  customary 
price.  The  members  of  modern  industrial  society  produce  but 
one  or  two  things  for  the  market.  Frequently,  they  produce 
only  one  part  of  a  number  of  parts  which  are  afterwards  put 
together  to  make  the  complete  article.  The  parts  representing 
the  labor  of  many  different  men,  manufactured  frequently  in 
distant  portions  of  the  world,  are  brought  together,  adapted 
and  connected  to  make  up  a  whole.  A  great  shoe  factory,  means 
some  hundreds  of  families  engaged  in  producing  a  single  neces- 
sary want.  It  frequently  happens  also,  that  the  making  of  shoes, 
is  the  chief  industry  of  a  town.  Other  towns  are  devoted  to 
iron  manufactures,  and  others  to  woolen  or  cotton  goods.  The 
townspeople  seldom  use  their  own  manufactures.  Their  shoes 
and  their  clothing  are   made  elsewhere.     The  distribution  is 


INTERNATIONAL    COMMERCE.  %0% 

affected  by  that  factor  of  industrial  society,  called  commerce. 
Commerce  takes  the  shoes  from  Brockton  and  Lynn  and  from  the 
great  slioe  towns  where  they  are  manufactured,  and  where  there 
is  a  surplus  of  shoes,  and  distributes  them  throughout  the 
country,  among  cities  and  towns  and  hamlets,  where  they  are 
not  made,  and  among  foreign  peoples.  It  takes  back  to  the 
shoe  towns,  leather  from  the  tanneries,  and  wheat  and  beef 
from  the  agricultural  districts,  which  it  exchanges  for  shoes. 
It  exchanges  some  of  the  shoes  for  raw  hides,  which  it  gets  from 
the  tanneries.  Its  agents  are  the  merchants,  the  railroad,  the 
ship,  the  telegraph,  and  the  banks. 

The  Control  of  Trade. — Economic  discussion  bearing  upon 
international  commerce,  relates  mainly  to  the  regulation  and 
control  of  such  commerce.  The  historical  evolution  of  com- 
mercial regulations,  therefore,  is  the  proper  beginning  of  the 
discussion.  While  some  of  the  steps  in  the  development  have 
been  mentioned  from  time  to  time,  there  has  been  no  attempt 
to  state  them  connectedly.  They  may  be  briefly  summarized 
as  follows:  — 

1.  Family  Control  of  Trade. — We  commence  with  the  earliest 
stage  of  economics,  that  relating  to  the  economics  of  the  family. 
Property  is  owned  and  enjoyed  collectively,  and  each  economic 
family,  as  a  unit,  jealously  regulates  the  interchange  of  com- 
modities with  other  families.  The  economic  family,  as  we  have 
seen,  includes  the  nomadic  horde  or  tribe.  It  is  the  domestic 
group  irrespective  of  number.  In  the  part  devoted  to  the  eco- 
nomics of  the  family,  the  regulation  of  interfamily  commerce 
was  illustrated  by  reference  to  the  custom  of  the  Nubians, 
according  to  which,  when  one  tribe  prepares  to  trade  with 
another,  the  lines  are  drawn  up  in  battle  array,  and  the  inter- 
change is  affected  between  the  lines,  by  individuals  selected  for 
that  purpose.  Among  monarchic  tribes,  the  control  is  exer- 
cised by  the  chief,  primarily  for  his  personal  benefit,  and  second- 
arily for  the  benefit  of  his  tribe.  J.  G.  Wood,  in  his  Uncivil- 
ized Races  of  Men,  makes  a  statement  regarding  certain  customs 
existing  among  the  Ahts  of  Vancouver's  island,  which  illus- 
trates the  formalities  attending  tribal  intercourse.  His  state- 
ment is  this:  —  "Many  disputes  arise  between  tribes,  on  the 
14 


210  DESCRIPTIVE  ECONOMICS. 

finding  of  dead  whales,  near  the  indefinite  boundaries  of  the 
tribal  territories.  If  the  quarrel  is  serious,  all  intercourse  ceases, 
trade  is  forbidden,  and  war  is  threatened.  By  and  by,  when 
the  loss  of  trade  is  felt,  negotiation  is  tried.  An  envoy  is 
selected,  who  is  of  high  rank  in  his  own  tribe,  and  if  possible, 
connected  with  the  other  tribe,  by  marriage.  He  is  usually  a 
quiet  man,  of  fluent  speech.  Wearing  white  eagle  feathers  in  his 
head  dress,  as  a  mark  of  peace,  he  departs  in  a  small  canoe. 
Only  one  female  attendant,  generally  an  old  slave,  accompanies 
him,  to  assist  in  paddling,  as  the  natives  never  risk  two  men  on 
such  occasions.  The  envoy's  return,  is  anxiously  awaited.  As 
a  general  rule,  the  first  proposition  is  rejected.  Objections, 
references  and  counter-proposals  frequently  make  three  or  four 
embassies  necessary,  before  the  question  can  be  settled." 

2.  Village  Control  of  Trade. — When  the  village  community 
stage  is  reached,  there  are  signs  of  stated  interchange  of  com- 
modities between  villages.  Many  villages  begin  to  produce  a 
surplus,  and  by  degrees  they  learn  to  exchange  the  surplus  with 
other  villages.  But  it  is  common  property,  in  case  of  the  prim- 
ative  villages,  and  the  entire  community,  through  its  civil  or- 
ganization, controls  and  regulates  the  exchanges.  There  are 
some  evidences  going  to  prove  that  among  certain  village  com- 
munities of  the  East,  there  was  a  communal  officer,  chosen  at 
birth,  who  had  absolute  authority  in  the  matter  of  regulating 
inter-village  trade.  The  economic  rivalry  which  culminates  in 
the  stage  of  the  municipal  economy,  begins  to  show  itself  and 
villages  regulate  commerce  in  an  endeavor  to  obtain  advantage 
over  rival  villages.  Each  community  levies  toll  and  taxes  upon 
the  members  of  other  communities,  desiring  to  engage  in  trade, 
to  the  end  that  the  community,  as  a  unit,  may  receive  what- 
ever benefit  lies  in  inter-village  commerce. 

3.  City  Control  of  Trade,  has  been  stated  at  length  in  the 
chapter  entitled  "The  Trader."  Community  of  property  has 
long  since  disappeared  and  private  ownership,  at  least  of  per- 
sonal property,  has  taken  its  place.  Inter-municipal  commerce 
is  not  regulated  because  the  citizens  have  a  common  interest  in 
the  commodities  of  exchange,  but  for  the  purpose  of  enhance- 
ing  the  value  and  benefits  of  citizenship.     Economic  rivalry 


INTERNATIONAL   COMMERCE.  211. 

between  cities  is  intense.  The  one  absorbing  purpose  of  each 
city  is  to  obtain  economic  supremacy  and  directly  and  indirectly 
further  the  fortunes  of  the  citizen  class. 

The  Balance  of  Trade. — In  a  preceding  part  of  the 
chapter  the  statement  was  made  that  the  manufacturers  of  a 
shoe  town  pay  for  the  leather  which  they  bring  into  the  town 
by  the  shoes  which  they  ship  out.  All  the  raw  products  used 
in  the  process  of  shoe  manufacture  and  the  food  and  clothing 
of  those  engaged  in  the  industry  must  be  paid  for  by  exchang- 
ing shoes.  Exportation  and  importation,  in  connection  with 
the  industrial  activity  of  the  town,  is  constantly  going  on. 
Manufactured  goods  are  being  exported  and  raw  products  and 
necessary  subsistence  for  the  inhabitants  are  being  imported. 
The  balance  of  trade  is  the  difference  between  the  exports  and 
the  imports.  If  the  town  exports  more  than  it  imports,  the 
balance  of  trade  is  in  its  favor.  If  it  imports  more  than  it  ex- 
ports, the  balance  of  trade  is  against  it. 

The  Balance  of  International  Trade. — In  the  same  way, 
nations  are  exporting  and  importing.  They  are  exporting  those 
classes  of  manufactures  and  of  agricultural  products  of  which 
they  have  a  surplus,  and  importing  those  classes  of  which  they 
have  a  deficiency.  They  pay  for  their  imports  with  their  ex- 
ports. It  is  really  a  process  of  barter.  Exports  are  exchanged 
for  imports.  Europe  does  not  ship  to  the  United  States  the 
cash  to  pay  for  our  wheat.  She  offsets  our  account  by  the 
price  of  the  textile  fabrics  and  other  things  which  we  get  of 
her.  If  we  export  more  than  we  import,  then  the  balance  of 
trade  is  said  to  be  in  our  favor.  We  have  a  favorable  balance 
of  trade,  in  which  case  Europe  would  be  obliged  to  ship  money 
to  us  to  pay  this  balance.  The  balance  of  trade  theory  began 
with  the  prosperity  of  Venice  and  Genoa.  For  many  years 
afterwards  there  was  a  struggle  among  European  nations  to 
acquire  a  favorable  balance  of  trade.  It  gave  rise  to  a  school 
of  economists  known  as  the  mercantilists.  In  the  opinion  of 
the  mercantilists  the  one  thing  which  would  assure  the 
material  welfare  of  a  nation  was  a  favorable  balance  of  trade. 
They  believed  that  if  a  nation  exported  more  goods  than  it  im- 
ported, and  the  difference  came  back  in  gold  or  silver,  and  thus 


212  DESCRIPTIVE  ECONOMICS. 

increased  the  supply  of  money,  the  nation  couldn't  help  being 
prosperous.  They  reasoned  that  the  possession  of  money  is 
the  first  condition  of  wealth,  and  the  nation  which  has 
the  most  of  it  must  be  the  wealthiest.  They  urged  that 
each  nation  should  strive  by  every  honorable  means  to  obtain 
the  money  of  other  nations  by  creating  a  favorable  balance  of 
trade.  Under  the  stimulus  of  these  doctrines  commerce  was 
unduly  magnified.  It  came  to  be  fostered  at  the  expense  of 
agriculture  and  manufactures.  This  theory  of  the  mercantilists, 
modified  to.  suit  the  growth  of  economic  thought,  has  come  to 
be  known  as  the  balance  of  trade  theory. 

The  Theory  Opposed. — The  proposition,  that  if  a  nation's 
imports  exceed  its  exports  it  will  be  poorer  to  the  amount  of 
the  difference  and  after  a  time  the  loss  of  money  will  be  felt, 
looks  reasonable  on  its  face.  The  balance  of  trade  theory, 
therefore,  has  never  lacked  for  advocates  since  it  originated. 
It  is  lost  to  sight  now  and  then,  but  only  temporarily.  It  is 
soon  revived  and  there  is  a  constant  tendency  to  go  back  to  it 
as  a  foundation  for  argument  relating  to  the  expediency  of 
international  trade  regulations.  There  are  those,  however, 
who  deny  the  truth  of  the  premises  upon  which  the  balance 
of  trade  theory  is  based.  They  do  not  accept  its  conclusions 
either.  It  assumes,  they  say,  that  the  welfare  of  a  nation 
depends  upon  the  amount  of  money  which  it  has ;  that  if 
nations  keep  money  flowing  toward  them  by  keeping  the  balance 
of  trade  in  their  favor  they  are  certain  to  be  prosperous.  They 
oppose  it  because  it  does  not  found  national  welfare  upon  the 
volume  of  trade  and  industry  or  upon  the  number  of  people 
who  are  profitably  employed,  but  solely  upon  the  possession  of 
money.  They  hold  that  no  conclusion  whatever  can  be  drawn 
as  to  national  wealth  or  poverty  from  the  mere  fact  of  a  favor- 
able or  unfavorable  balance  of  trade.  It  is  claimed  that  the 
unsoundness  of  the  theory  is  illustrated  by  the  fact  that  many 
countries,  at  various  times,  for  periods  of  considerable  duration, 
have  had  unfavorable  balances  of  trade  and  yet  to  all  appear- 
ance have  been  a  prosperous  and  contented  people.  Germany, 
France,  England  and  Belgium,  are  shown  to  have  prospered 
during  periods  when  balance  of  trade  has  been  against  them. 


INTERNATIONAL   COMMERCE.  213 

It  is  argued  that  because  prosperity  accompanies  a  favorable 
balance  of  trade,  it  is  no  proof  that  the  favorable  balance 
creates  the  prosperity.  It  is  further  argued  that  in  interna- 
tional trade,  both  sides  better  their  condition,  irrespective  of 
the  balance  of  trade. 

Regulation  of  International  Commerce. — The  very  fact 
that  this  theory  of  the  balance  of  trade  exists,  is  a  partial  ex- 
planation, at  least,  of  governmental  regulation  of  international 
trade.  It  is  a  good  excuse  also  for  such  regulation,  for  if  a 
favorable  balance  of  trade  has  anything  to  do  with  national 
wealth  and  prosperity,  why  shouldn't  international  trade  be 
regulated  so  as  to  create,  to  the  greatest  possible  extent,  a 
balance  of  trade  in  favor  of  the  nation  enacting  the  regulations? 
An  original  motive  for  the  enactment  of  international  trade 
regulations  then,  was  to  secure  a  favorable  balance  of  trade. 
Another  motive  was  to  procure  a  national  revenue.  These  are 
the  motives  impelling  action  in  modern  times.  Among  the 
nations  of  antiquity  and  among  Asiatic  nations  until  recently, 
there  was  still  a  third  motive.  It  was  the  prevention  of  inter- 
national communication.  In  their  eyes  all  foreigners  were 
barbarians,  and  the  less  they  had  to  do  with  them  the  better. 

The  Form  of  the  Regulations. — In  modern  times  the 
regulation  of  international  commerce  is  chiefly  affected  by 
tariff  or  customs  laws.  They  are  laws  imposing  a  tax  upon 
international  exports  or  imports.  Their  effect  is.  to  compel  a 
merchant  desiring  to  ship  goods  abroad  or  bring  them  into  the 
country  from  abroad,  as  the  case  may  be,  to  pay  a  tax  upon 
them  at  the  port  of  shipment  or  entry. 

Two  Kinds  of  Tariffs. — Tariff  regulations  may  be  divided 
into  two  main  classes,  corresponding  to  the  two  purposes  for 
which  they  are  mainly  levied  in  modern  times.  Their  purposes, 
as  already  appears,  are  to  create  a  source  of  government  revenue 
or  to  advance  the  industrial  welfare  of  the  nation.  Tariff 
regulations  which  are  designed  to  procure  revenue  are  Eevenue 
Tariffs.  Tariffs  having  the  other  object  in  view  are  Protective 
Tariffs.  The  latter  nomenclature  arises  from  the  fact  that 
protective  tariffs  are  designed  to  protect  home  production  and 
home  industries  against  foreign  competition  arising  from  the 


214  DESCRtPTtVE  ECONOMICS, 

iiftportation  of  foreign  goods.  The  abolition  of  all  trade  regu- 
lations whatever,  is  free  trade.  A  policy  between  a  tariff  for 
revenue  only  and  a  protective  tariff,  is  frequently  advocated 
and  sometimes  put  into  practice.  It  involves  the  imposition  of 
such  taxes  as  will  secure  the  desired  government  revenue  and 
at  the  same  time  protect  home  manufacturing  industries.  It 
involves,  therefore,  the  imposition  of  taxes  on  certain  classes 
of  imports  only.  The  imports  which  are  free,  according  to 
this  half-way  policy,  consist  mainly  of  raw  products  of  other 
countries  upon  which  the  labor  of  our  own  people  can  be  ex- 
pended. It  is  claimed  that  home  manufacturing  industries 
are  thus  stimulated  and  home  labor  finds  employment.  Tariff 
for  revenue  only  is  the  present  policy  of  England.  Taxes  are 
imposed  upon  imports,  luxuries  mainly,  solely  with  the  view  of 
procuring  a  revenue  for  the  support  of  the  government.  Tariff 
for  protection  has  been  the  policy  of  the  United  States  for  many 
years.  The  amount  of  the  tax  imposed  has  fluctuated  how- 
ever, as  different  political  parties  or  party  leaders  have  con- 
trolled the  government.  There  have  been  times  when  the 
duties  imposed  have  been  so  low  as  to  produce  only  necessary 
government  revenues.  At  other  times  they  have  been  so  high 
as  to  absolutely  prohibit  importation  of  foreign  goods  except 
at  a  loss  to  the  importer. 

Free  Trade  and  Protection. — Descriptive  economics  is 
not  concerned  with  the  advocacy  of  theories.  Its  object  is 
rather  to  describe  all  theories  which  have  appreciably  affected 
economic  history.  It  is  not  interested,  therefore,  in  seeking  to 
know  whether  free  trade  or  protection  is  the  correct  theory. 
It  prefers  to  state  the  arguments  for  protection  side  by  side 
with  the  arguments  for  free  trade.  No  inference  is  drawn,  as 
to  the  relative  weight  of  the  several  arguments,  from  the  order 
in  which  they  are  stated.  One  protectionist  might  claim  a 
superiority  in  favor  of  some  one  argument  over  all  others, while 
another  protectionist  would  give  that  argument  an  inferior 
place. 

Arguments  for  Free  Trade. — We  will  state  first  some 
of  the  leading  arguments  advanced  by  those  who  advocate  un- 
restricted international  commerce.     When  they  are  examined 


INTERNATIONAL    COMMERCE.  215 

it  is  seen  that  the  number  of  those  arguments  which  are 
independent  of  each  other  and  are  of  a  primary  nature,  are 
Tery  limited.  The  same  observation  will  apply  to  the  pro- 
tectionists' arguments.  They  dove-tail  together  and  depend 
upon  each  other.  Most  of  them  grow  out  of  a  few  fundamental 
propositions.  For  convenience  of  reference  we  will  number 
them,  bearing  in  mind  that  the  order  in  which  they  are  stated 
is  not  intended  to  indicate  priority. 

1.  Advantages  of  Market. — If  foreign  trade  is  unrestricted 
^we  can  sell  our  surplus  productions  in  the  highest  market,  and 

provide  for  our  deficiencies  in  the  lowest  market.  If  foreign 
products  can  be  sold  to  us  more  cheaply  than  home  products, 
but  by  artificial  means,  like  the  tariff,  they  are  kept  out  of 
market,  then  the  restriction  compels  us  to  pay  an  artificial 
price.  For  instance,  we  can  raise  beef  on  our  western  prairies 
more  cheaply  than  the  English  farmers  can  produce  their  beef 
supply.  We  ought,  therefore,  to  be  allowed  to  take  our  beef 
to  England,  and  if  England  can  make  iron  cheaper  than  we 
can  make  it,  we  should  be  allowed  to  exchange  our  beef  there 
for  iron  and  bring  back  the  iron  for  use  at  home.  We  are, 
therefore,  prevented  from  selling  in  the  dearest  market  and 
purchasing  in  the  cheapest,  and  one  of  the  results  is  to  make 
our  own  home  products  dearer. 

2.  Procuring  Exotic  Products. — If  international  trade  is  free 
and  unrestricted,  every  nation  by  making  the  proper  exchanges 
can  obtain  those  commodities  not  natural  to  its  climate,  or 
which  could  not  be  produced  except  at  great  cost.  In  modern 
times  various  products  have  come  into  demand  in  every  nation, 
and  have  become  necessities  of  daily  life^  which  are  non- 
indigenous,  and  cannot  be  produced  there,  except  at  a  cost  far 
in  excess  of  the  cost  of  production  abroad. 

3.  The  Greatest  Good  to  the  Greatest  Number. — The  artificial 
price  which  results  from  placing  a  protective  tariff  upon  im- 
ported goods,  gives  an  extra  profit,  to  be  sure,  to  those  who  are 
engaged  in  producing  or  manufacturing  those  goods  at  home. 
That  extra  profit,  however,  is  distributed  among  a  few  persons 
only.  Industrial  society  as  a  whole  gets  comparatively  little 
benefit  from  it.     It  is  not  a  compensation  for  the  increased 


316  DESCRIPTIVE  ECONOMICS. 

price  which  the  mass  of  people  have  to  pay.  Farther,  if  we 
have  to  pay  more  for  imported  necessities,  having  only  so  much 
income  to  spend,  we  can  buy  less  home  goods.  For  this  reason 
protective  duties  become  scarcity  duties. 

4.  Protection  is  Rohhery. — It  violates  the  natural  law  of  sup- 
ply and  demand.  It  infringes  upon  the  right  of  each  one  to 
buy  and  sell  where  he  chooses. 

5.  Ultimate  Injury  to  Home  Industry. — If  there  were  no 
protective  tariff,  manufacturers  engaged  in  protected  indus- 
tries would  employ  their  capital  in  other  industries,  which  are* 
naturally  of  such  a  character  as  to  be  profitably  carried  on  at 
home.  Home  capital  would  be  thus  employed  in  carrying  on 
the  natural  industries  of  the  country,  and  the  products  thus 
obtained  could  be  exchanged  for  the  products  which  can  be 
made  more  cheaply  in  other  countries.  Both  sides  would  then 
be  benefited,  and  it  would  be  better  for  each  nation  to  engage 
in  the  production  of  those  things  which  its  natural  resources 
enable  it  to  produce  at  the  least  cost. 

6.  Limitations  upon  Exports. — If  imports  are  limited  by  the 
protective  tariff,  in  the  end,  exports  will  also  be  limited,  and 
will  be  limited  to  an  equal  extent.  This  must  be  the  fact  be- 
cause countries  to  which  we  export  cannot  continue  to  pay  us 
interminably,  unless  we  import  from  them.  Some  time  or 
other  it  would  come  to  pass,  that  we  must  stop  exporting  be- 
cause there  would  be  no  foreign  market  for  our  surplus. 

7.  Increase  of  Industry  not  Real. — Hinderance  to  importa- 
tion of  foreign  commodities  does  not  produce  any  real  increase 
of  industrial  activity.  It  does  not  give  room  for  greater  invest- 
ment of  capital,  or  furnish  a  greater  outline  for  labor.  It 
results  simply  in  a  change  in  the  direction  of  application.  It 
does  not  follow  that  because  a  nation  consumes  less  of  foreign 
commodities  by  reason  of  protective  tariffs,  that  the  difference 
is  produced  at  home. 

8.  Assisting  Some  and  Injuring  Otliers. — A  protective  policy 
affords  an  opportunity  for  special  legislation.  Special  interests 
get  control  of  legislation,  and  tariff  laws  become  class  laws. 
One  industry  is  protected,  while  another  is  not.  Protection  to 
one  industry  always  injures  some  other  industry.    It  is  diflScult, 


INTERNATIONAL    COMMERCE.  317 

if  not  impossible,  to  frame  tarififs  so  as  to  bear  equally  on  all 
industries,  on  all  manufacturing  industries,  as  well  as  upon 
agricultural  and  commercial  industries.  Protectionism  comes 
to  foster  monopolies,  and  enables  gigantic  combinations  to 
control  industrial  enterprises. 

9.  The  Benefit  to  the  Working  Man. — If  protection  effects 
any  amelioration  of  the  condition  of  the  employe  class,  it  is 
only  temporary  at  the  least.  If  foreign  industry  is  decreased  by 
reason  of  protective  tariffs,  foreign  labor  soon  seeks  our  shores. 
If  an  artificial  price,  imposed  by  a  protective  tariff,  increases 
home  production  and  causes  more  wages  to  be  paid  out,  it  is  a 
relative  payment  only,  and  not  an  absolute  payment.  That  is 
to  say,  wages  at  home  may  be  relatively  higher,  but  not 
absolutely  higher.  If  it  is  desired  to  protect  home  labor,  a  tax 
should  be  put  upon  the  importation  of  labor,  so  as  to  make  labor 
dear,  and  then  foreign  commodities  should  be  imported  for 
subsistence.  Moreover,  while  the  wages  of  laboring  men  may 
appear  to  be  higher  at  home  than  abroad,  indirectly  he  is 
assessed  to  pay  the  increased  price  imposed  by  the  tariff.  The 
laboring  man  is  a  tax  payer  as  well  as  the  capitalist.  The 
heaviest  tax  payer  is  he  whose  income  bears  the  closest  relation 
to  the  necessities  of  life. 

10.  Protectionism  and  Patriotism. — Protectionism  is  not 
necessary  in  order  to  create  patriotism.  International  com- 
munication has  never  been  so  far  reaching,  and  international 
commerce  never  so  widespread,  as  in  modern  times.  There  has 
been  no  loss  of  patriotism,  however.  Nationalism  has  rather 
assumed  higher  and  more  pronounced  forms. 

11.  Survival  of  Medievalism, — Protectionism  is  a  survival  of 
the  economy  of  the  middle  ages,  when  the  gilds  and  the 
gild  system  exercised  a  despotic  power  over  industry.  It 
is  applying  to  international  commerce  the  medieval  restrict- 
ions and  regulations  which  were  applied  to  domestic  and  inter- 
municipal  commerce.  This  argument  is  illustrated  by  the 
curious  regulations  of  trade  which  existed  in  the  city  of  London 
in  the  early  part  of  the  14th  century.  It  is  related  that  one 
Thomas  Lespicer  of  Portsmouth,  brought  to  London  six  pots 
of  eels.    Instead  of  standing  with  them  in  the  open  market  for 


218  DESCRIPTIVE  ECONOMICS. 

four  days,  which  by  law  he  was  bound  to  do,  he  took  them 
secretly  to  the  house  of  a  fishmonger,  secreted  them  there  for 
two  days  and  afterwards  sold  them  without  bringing  them  to 
the  open  market.  Thomas  confessed  his  guilt  and  took  oath 
that  henceforth  he  would  always  sell  eels  at  the  proper  place, 
and  the  fishmonger  likewise  confessed  his  guilt,  and  took  oath 
that  he  would  always  tell  strangers  where  they  ought  to  take 
their  eels.  Later  on,  Londoners  were  glad  to  know  that  the 
king  ordered  that  aliens  as  well  as  denizens  might  freely  buy 
and  sell  "  to  what  person  it  should  please  them." 

12.  Abandoning  Protection. — If  protection  is  a  temporary 
expedient  for  the  promotion  of  young  industries  in  new 
countries,  who  is  to  say  when  it  shall  be  abolished?  How  shall 
it  be  decided  when  the  time  is  come  that  certain  industries 
shall  be  surrendered  "  to  all  the  wind,  rain  and  sunshine  of 
free  competition?" 

13.  Protection  and  the  Industrial  Stage  of  Economics. — 
Finally  it  is  argued  that  in  any  event  protection  cannot  be 
favorable  to  a  country,  unless  it  has  entered  upon  the  industrial 
stage  of  economics.  All  the  factors  of  national  economic  life 
must  first  be  brought  into  action.  Domestic  commerce  must 
have  reached  its  full  development.  Manufacturing  industry, 
mining  and  agriculture  must  have  first  come  to  work  in  unison, 
and  the  division  of  employments  must  have  become  fully 
developed. 

Arguments  for  Protection. — An  analysis  of  the  foregoing 
free  trade  arguments,  shows  that  some  of  them  are  devoted  to 
denials  of  the  claims  of  the  protectionists.  They  are  not 
strictly  arguments,  and  many  of  them  are  not  worthy  of  being 
called  arguments.  The  same  observations  apply  to  the  argu- 
ments for  protection  which  follow.  They  are  worth  bearing  in 
mind,  however,  because  they  form  a  part  of  current  tariff  dis- 
cussion and  need  to  be  stated  if  only  to  expose  their  sophistry. 

1.  Foreign  Capital  Brought  in. — The  imposition  of  pro- 
tective duties  produces  a  change  in  the  direction  of  the  invest- 
ment of  capital,  and  likewise  a  change  in  the  application  of 
labor.  Home  industry  is  increased,  and  foreign  industry  de- 
creased to  a  like  extent.     When  foreign  factories  are  closed 


INTERNATIONAL    COMMERCE.  219 

and  workers  are  idle  there,  there  must  be  just  so  many  more 
factories  in  operation  at  home,  and  so  many  more  workers  busy. 
One  man's  gain  must  be  some  other-  man's  loss.  Labor  is 
benefited,  wages  are  increased,  and  amelioration  and  prosperity 
ensues.  Moreover,  the  capital  which  would  be  profitably  em- 
ployed in  foreign  countries  must  find  investment  in  our  own 
country,  and  furnish  so  much  more  employment  here.  AVithin 
the  last  few  years,  much  English  capital  has  been  invested  in 
the  United  States.  Syndicates,  as  they  are  called,  have  been 
formed  of  English  capitalists,  and  great  American  industrial 
concerns  have  been  transferred  to  the  syndicates. 

2.  Infant  Industries. — Economic  growth,  from  the  lower  to 
the  higher  stages,  may  be  rendered  difficult  if  unrestricted 
competition  with  foreign  industry,  already  developed,  is  allowed. 
New  industries  will  be  stimulated  by  restricting  foreign  impor- 
tation, and  efforts  will  be  made  to  produce  those  things  which 
will  satisfy  the  highest  economic  wants.  The  natural  resources 
of  a  new  country  will  thus  be  developed.  New  incentives  and 
impulses  will  be  spread.  If  there  is  no  protection  in  a  new 
country,  industrial  talent  will  be  undervalued  and  forced  to 
emigrate.  Younger  nations  will  be  compelled  to  act  as  agri- 
cultural districts,  while  other  nations  are  as  cities  and  the 
centers  of  industrial  activity.  For  the  purpose  of  establishing 
and  developing  new  industries  protection  may  be  merely  a 
temporary  matter,  and  after  they  are  established,  it  may  be 
abolished. 

3.  Protection  and  Nationalism. — The  protective  system 
develops  political  independence  as  well  as  economic  inde- 
pendence. It  is  productive  of  nationalism  and  patriotism, 
while  free  trade  promotes  cosmopolitanism.  Patriotism  and 
love  of  country  are  prime  requisites  of  national  welfare,  and 
whatever  will  bind  a  people  together  should  be  encouraged. 

•Protectionism  will  bind  them  together,  because  it  separates 
them  from  the  other  nations  and  makes  the  various  parts  of 
the  country  economically  dependent.  It  is  the  duty  of  the 
state  as  well  as  the  individual  "to  provide  for  his  own, 
especially  them  that  are  of  his  own  house." 

4.  Military  Necessities. — "In  time  of  peace  prepare  for  war." 


320  DESCRIPTIVE   ECONOMICS. 

Each  nation  should  so  regulate  its  economic  affairs  that  in  case 
of  war  it  will  not  be  crippled  by  being  cut  off  from  41  base  of 
supplies. 

5.  A  Social  Leaven. — Protective  tariffs  tend  to  do  away 
with  distinctions  between  economic  classes.  Such  distinctions 
are  more  pronounced  among  people  living  in  an  agricultural 
condition,  or  among  a  people  whose  industry  is  mainly  directed 
to  the  production  of  raw  materials.  In  those  conditions  a 
landed  aristocracy  usually  prevails.  By  shutting  out  foreign 
manufactures,  home  manufactures  must  take  their  place,  and 
the  artisan  class^  always  a  great  factor  in  national  economy, 
assumes  a  prominent  place.  Thus  protection  exalts  the  artisan 
class  at  the  expense  of  the  landed  class,  and  leavens  society. 

6.  Protection  in  History. — The  nations  of  antiquity  gave 
little  thought  to  the  protection  of  industry.  It  is  an  historical 
fact  that  their  industries  were  invariably  insignificant,  and 
were  confined  to  the  handling  of  raw  products. 

7.  Protection  is  not  Rohhery. — The  so-called  right  of  man  to 
buy  and  sell  in  any  market,  does  not  exist.  The  individual 
must  surrender  his  individual  rights  to  the  state  for  the  com- 
mon welfare.  Individualism  must  give  way  to  nationalism, 
and  individual  economic  life  must  be  subservient  to  the 
economic  life  of  the  nation.  The  whole  state  must  be  con- 
sidered a  unit,  as  to  economic  questions  which  affect  the  entire 
population.  The  state  ought  to  do  what  is  best  for  the  whole 
people,  and  if  restriction  of  foreign  commerce  will  best 
subserve  the  nation  as  a  whole,  individual  rights  must  be 
surrendered. 

8.  Equilibrium  of  the  Three  Industries. — Free  trade  creates 
an  undue  development  of  commerce  and  manufactures  at  the 
expense  of  agriculture.  It  prevents  the  three  industries  from 
assuming  a  due  balance.  Varied  industry  is  the  foundation  of 
modern  national  welfare.  It  is  neglected  under  the  free  trade 
policy.  The  country  which  becomes  as  a  vast  city  and  the  rest 
of  the  world  an  agricultural  country,  taking  its  surplus  to  the 
city  in  exchange  for  the  city  manufactures  and  luxuries, 
assumes  an  economic  one-sidedness.  England  has  boasted  that 
under  her  free  trade  system  she  would  become  as  such  a  city. 


INTERNATIONAL    COMMERCE.  221 

with  other  nations,  like  agricultural  districts  clej)endent  upon 
her.  It  is  argued  that  while  she  may  have  become  such,  it  has 
been  at  the  expense  of  severe  agricultural  depression.  Her 
farmers  are  in  a  most  forlorn  state. 

The  Solution  of  the  Question. — It  is  plain  that  both 
sides  cannot  be  right.  Many  of  these  arguments  are  diametri- 
cally opposed  to  each  other.  If  some  are  true,  others  are 
false.  Both  sides  deal  freely  with  statistics  to  prove  the  truth 
of  tlieir  arguments.  In  such  cases  statistics  are  usually  mis- 
leading. No  inference  can  ordinarily  be  founded  upon  them. 
Doubtless  circumstances  of  time,  place  and  physical  limitations 
must  be  taken  into  account  in  applying  either  the  free  trade  or 
protective  system.  The  true  solution  may  depend  upon  some 
of  these  circumstances: 

a.  The  Stage  of  Economic  Growth. — Protection  may  be  a 
good  thing  at  one  stage  of  national  economic  development, 
and  free  trade  at  another. 

b.  Physical  Environment. — The  climate,  soil  and  diversity 
of  natural  resources  must  doubtless  be  taken  into  account.  It 
would  be  folly  for  a  nation  to  restrict  the  importation  of  com- 
modities which  it  cannot  produce  at  home. 

c.  Territorial  and  Physical  Geography. — A  nation  extending 
over  many  degrees  of  latitude,  with  diverse  climates  and  diverse 
agricultural  resources,  is  in  a  far  different  condition  to  talk 
about  free  trade  or  protection,  from  that  of  a  nation  possessing 
a  limited  territory  with  a  uniformity  of  climate  and  natural 
productions.  Internal  waterways  and  means  of  internal  com- 
munication, as  well  as  extent  of  seacoast  and  possession  of 
numerous  harbors  will  also  be  taken  into  account. 

d.  The  Proximity  of  Neighboring  Nations  will  also  have  a 
bearing  upon  the  commercial  policy  of  a  nation.  England 
enjoys  a  pre-eminent  situation  for  international  trade.  The 
extent  of  her  sea  coast  and  the  number  of  her  harbors  compare 
favorably  with  extent  of  territory.  Why  should  not  these 
things  be  taken  into  account  in  determining  what  her  policy 
should  be,  and  why  should  not  a  nation  devoid  of  these  advan- 
tages, take  that  fact  into  account? 

Economic  Progress. — Closer  international  communication 


222  DESCRIPTIVE  ECONOMICS. 

would  seem  to  be  in  harmony  with  the  progress  of  industrial 
society.  There  appears  to  have  been  a  gradual  evolution  of 
industrial  society,  commencing  with  the  barbarous,  isolated 
family  as  an  economic  unit,  through  the  village  community 
and  then  the  city  to  the  nation.  With  each  advancing  step 
intercourse  has  been  closer.  Mutual  co-operation  between  the 
units  has  increased.  To  restrict  international  commerce  and 
thus  indirectly  restrict  international  intercourse  would  appear 
to  be  like  throwing  a  stumbling  block  in  the  way  of  the 
further  development  of  industrial  society. 

Importance  of  the  Subject  Overestimated. — The  ques- 
tion of  restricting  or  regulating  international  commerce,  has 
been  given  undue  importance  as  compared  with  other  economic 
questions.  Its  importance  has  been  overestimated  by  reason 
of  the  political  cast  which  has  been  given  to  its  discussion. 
Having  been  made  a  purely  political  question  instead  of  an 
economic  question,  its  debate  has  been  heated  and  rancorous, 
rather  than  reasonable  and  decorous.  If  more  attention  were 
paid  to  questions  relating  to  the  development  of  internal  com- 
merce; to  the  installation  of  means  for  domestic  transporta- 
tion, more  good  would  be  done.  It  is  pointed  out  that  by 
international  commerce,  only  one  side  is  benefited.  With 
domestic  commerce,  both  sides  to  the  transaction  are  benefited. 
There  is  greater  rapidity  of  circulation  in  the  case  of  domestic 
commerce.  Capital  is  turned  quicker.  It  is  said  that  twelve 
exchanges  can  be  made  at  home  for  one  abroad. 


INTERNATIONAL  ECONOMIC  PROBLEMS.  233 


CHAPTER  11. 
INTERNATIONAL   ECONOMIC   PROBLEMS. 

International  Migration. — In  the  United  States  this  is 
frequently  considered  a  serious  economic  problem.  When  Mal- 
thusianism  was  a  generally  accepted  theory,  nations  worried 
about  too  great  a  population.  In  modern  times,  however,  and 
among  the  western  nations,  the  more  worry  has  been  about  a 
decrease  or  too  slow  an  increase  of  population.  Population 
frequently  fails  to  increase  so  as  to  keep  pace  with  economic 
progress.  Nations  have  reason  to  rejoice  over  a  rapid  in- 
crease of  population  provided  they  can  show  a  commensurate 
economic  growth.  Various  modes  have  been  adopted  for  pro- 
moting the  increase  of  population.  In  France,  Colbert  agreed 
that  whoever  married  before  his  twentieth  year  should  be  ex- 
empt from  taxation  until  his  twenty-fifth,  and  he  who  had  ten 
children,  all  living,  should  be  exempt  from  taxation  for  all 
time.  America  has  always  called  for  immigrants.  There  has 
always  been  room  for  mature  men,  especially  men  from  thickly 
peopled  and  highly  civilized  countries.  Such  men  can  pro- 
mote the  industries  of  the  country  of  their  adoption.  The 
problem  therefore,  does  not  concern  the  mere  coming  of  immi- 
grants, but  the  character  of  the  immigrants  and  their  assimi- 
lation. If  they  bring  no  capital  whatever  with  them,  they  are  of 
no  advantage,  unless  they  are  good  and  able  workmen. 
If  they  have  clear  heads  or  able  bodies,  they  are  sure  to  do 
their  part  in  developing  the  economy  of  the  nation.  Either 
intelligence  or  physical  strength  will  constitute  capital  enough 
to  make  them  welcome  additions.  On  the  other  hand,  if  they 
come  without  any  worldly  goods  and  their  minds  have  assumed 
that  state  of  weakness  and  dependence  which  characterizes 
chronic  pauperism,  and  which  unfits  its  possessor  for  self  help, 
they  are  unwelcome  citizens.  Mere  lack  of  worldly  goods  is 
to  be  distinguished  from  the  pauper  condition.     Other  things 


224  DESCRIPTIVE  ECONOMICS. 

being  equal,  persons  who  have  from  time  to  time  received  pub- 
lic aid,  or  for  long  periods  have  been  associated  in  families 
having  pauper  dependencies,  are  liable  to  become  and  remain 
chronic  paupers.  They  assume  the  pauper  state  or  condition. 
The  burden  of  supporting  them  falls  upon  all  members  of  the 
community,  and  industrial  activity  must  be  vigorous  in  pro- 
portion to  the  number  of  the  pauper  class.  The  second  class 
of  unwelcome  immigrants  is  the  criminal  class.  It  is  not  the 
criminal  by  passion,  or  the  insane  criminal,  which  is  to  be 
feared  as  the  result  of  unlimited  immigration,  but  rather  the 
"  born  "  criminal.  He  is  sometimes  called  the  congenital  or 
instinctive  criminal.  He  possesses  a  vicious  state  of  mind,  due 
either  to  hereditary  influences,  or  long  association  with  vice 
and  crime.  In  some  cases  it  is  due  to  both.  The  international 
migration  problem  relates  to  the  exclusion  of  these  unwelcome 
classes,  and  the  promotion  of  migration  on  the  part  of  the 
other  classes.  Statisticians  claim  that,  in  recent  years,  the 
growth  of  pauperism  and  crime  has  been  at  a  standstill  in 
Europe,  and  has  increased  in  the  United  States. 

Chinese  Exclusion,  is  not  inaugurated  to  keep  out  the  un- 
welcome classes  which  have  been  specified.  The  one  real 
argument  against  Chinese  immigrants  has  been  their  failure  to 
become  naturalized,  or  to  become  American  citizens.  Back 
of  this,  however,  is  the  fact  that  the  politics  as  well  as  the 
economics  of  the  Orient  are  so  different  from  our  own,  that  it 
is  difficult  if  not  impossible  for  the  eastern  people  to  adapt 
themselves  to  our  economic  conditions  or  become  an  integral 
part  of  our  body  politic.  It  is  certainly  not  possible  in  the 
case  of  large  numbers  in  a  brief  period  of  time.  The  change 
means  something  like  the  passing  of  a  people  from  the 
economic  stage  of  the  village  to  the  economic  stage  of  the 
nation.  It  cannot  be  a  sudden  change,  but  must  be  a  growth 
involving  the  lapse  of  long  periods  of  time. 

International  Health. — International  migration  and  com- 
munication have  become  so  constant  and  assumed  such  vast 
proportions  as  to  cause  the  preservation  of  the  public  health 
to  become  an  international  economic  problem.  All  the  modern 
nations  have  instituted  systems  of  public  sanitation.  In 
Europe  there  are  three  systems.     There  is  first: 


INTERNATIONAL   ECONOMIC  PROBLEMS.  225 

1.  TJie  French  System.  Under  this  system  public  hygiene  is 
directed  by  Councils  of  Public  Health.  These  councils  have 
purely  consultative  powers.  Executive  authority  is  entrusted 
to  a  chief  health  officer,  or  a  Prefect,  who  is  ex-officio 
President  of  the  Council.  Over  all  there  is  a  National  Coun- 
cil, having  particular  charge  of  quarantines.  The  French 
system  prevails  in  France,  Italy,  Belgium  and  Spain. 

2.  llie  English  System  is  regulated  by  a  comprehensive 
scheme  of  sanitary  legislation.  The  system  was  inaugurated 
by  the  acts  looking  to  the  regulation  of  sewerage  in  the  reigns 
of  Henry  VIII.  and  Elizabeth.  Later  on  public  sanitation 
fell  into  disuse  and  the  United  Kingdom  assumed  such  an  un- 
sanitary state  that  the  cholera  killed  seventy  thousand  in  one 
year.  In  1848  health  laws  were  enacted  for  the  drainage  of 
marshes,  streets  and  houses,  and  for  preventing  the  contamina- 
tion of  rivers  and  streams.  Aqueducts  and  sewers  were  estab- 
lished. Under  the  English  system  the  execution  of  the  health 
laws  is  entrusted  to  a  General  Board  of  Health  for  each  munic- 
ipality. In  minor  instances,  however,  it  is  vested  in  Poor 
Boards. 

3.  Tlie  German  System,  which  is  the  third  in  vogue,  com- 
prises a  series  of  bureaus.  There  is  first,  a  District  Health 
Physician;  then  of  a  higher  grade  the  official  Guardian  of  the 
Public  Health.  Above  that  officer  is  the  Court  Physician, 
charged  with  attendance  on  the  poor.  A  little  higher  is  the 
Medical  College,  having  provincial  authority.  At  the  head  of 
the  system  is  a  Superior  Committee.  Holland,  Eussia,  Sweden 
and  Denmark  have  at  various  times  followed  Germany  in  the 
use  of  this  svstem. 

In  the  United  States,  the  several  states  have  from  time  to  time 
enacted  sanitary  legislation.  A  fair  sample  of  this  state  legislation 
is  that  of  New  York,  which  provides  a  Town  Board  of  Health  in 
each  town,  and  a  Municipal  Board  of  Health  for  each  city.  A 
State  Board  of  Health  has  general  supervision  and  powers.  The 
statutes  grant  autocratic  powers  to  these  various  boards.  They 
can  abate  and  summarily  remove  anything  which  is  detrimental 
to  the  public  health,  whether  it  be  a  sewer  or  cess-pool,  a  slaughter 
house  or  a  stagnant  pond.  There  is  also  a  National  Board  of 
15 


226  DESCRIPTIVE  ECONOMICS. 

Health.  That  board,  however,  having  but  little  authority 
within  the  precincts  of  a  state,  is  largely  of  an  advisory  nature. 
It  has  exclusive  jurisdiction  only  upon  United  States  property. 

Necessity  of  Centralization. — The  time  will  come,  doubt- 
less, when  the  states  will  have  to  surrender  some  authority  to  a 
national  body.  While  each  state  may  be  able  to  cope  with  a 
disease  arising  within  its  own  borders,  some  more  centralized 
authority  is  necessary  to  restrict  epidemics  assuming  national 
proportions.  Intercommunication  between  the  several  states 
is  such  that  a  wider  and  more  centralized  authority  will  be  de- 
manded. The  conflict  of  authority  which  arose  at  New  York 
during  the  threatened  cholera  invasion  of  the  summer  of  1892, 
showed  the  weakness  of  a  health  system,  or  in  that  case  a 
quarantine  system,  under  the  local  direction  of  the  states. 
Legislation  designed  to  inaugurate  a  national  quarantine  system 
will,  in  time,  overcome  these  defects. 

International  Health  Boards. — International  commerce 
and  travel  is  so  far  reaching  that  diseases  are  liable  to  assume 
an  international  character,  and  to  meet  the  condition  of  things 
national  boards  of  health  must  be  empowered  to  inaugurate 
and  maintain  international  sanitary  regulations  and  quaran- 
tines. For  centuries  cholera  has  been  endemic  in  parts  of 
Asia.  The  meager  facilities  for  its  communication  westward 
have  prevented  its  becoming  epidemic  in  America,  except  at 
rare  intervals.  When  communication  with  India,  for  instance, 
was  by  sailing  vessels,  around  the  Cape  of  Good  Hope,  the 
chances  for  the  introduction  of  the  disease  into  Europe  were 
slight.  The  opening  of  the  Suez  canal,  accompanied  by  con- 
stant and  quick  steam  communication  with  cholera  ports, 
has  infinitely  magnified  the  opportunities  for  cholera  epidem- 
ics in  the  West.  General  increase  of  intercommunication  has 
followed  the  increase  of  transportation  facilities  between  all 
parts  of  Asia  and  all  parts  of  Europe  and  America.  Commerce 
can  not  stop  for  fear  of  contagion.  It  must  go  on.  The 
nations  of  the  world  will  need  to  agree  upon  a  system  of  quar- 
antine and  by  friendly  co-operation  inaugurate  measures  pre- 
ventive of  international  epidemics. 

International  Money. — Each  nation  having  its  own  coin- 


INTERNATIONAL   ECONOMIC  PROBLEMS.  227 

age  and  monetary  system,  a  multiplicity  of  moneys  results.  It 
becomes  a  source  of  inconvenience  in  international  commerce. 
It  deters  intercommunication.  Much  has  been  done  to  bring 
about  an  international,  or  more  properly,  a  universal  system  of 
coinage.  A  beginning  was  made  in  Europe  by  the  Latin 
Monetary  Union,  formed  early  in  the  century,  composed  of 
France,  Spain,  Italy  and  Belgium,  and  which  existed  for 
seventy  years.  The  recent  international  monetary  conference 
of  Brussels,  afforded  some  evidence  of  international  monetary 
growth.  The  primary  purpose  of  that  conference  was  to  con- 
sider by  what  means,  if  any,  the  use  of  silver  could  be  increased 
in  the  currency  systems  of  the  nations  of  the  world.  So  far, 
international  effort  has  been  mainly  directed  toward  the  for- 
mation of  international  agreements  regarding  the  use  of  gold 
and  silver  as  money.  If  the  great  nations  of  the  world  could 
adopt  a  universal  system  of  coinage  by  agreeing  upon  a 
standard  of  purity  of  the  metals,  and  by  entering  into  an 
agreement  concerning  the  relative  use  and  coinage  of  gold  and 
silver,  the  first  great  step  would  have  been  taken  towards  an 
international  money.  A  greater  achievement  would  be  the 
coinage  of  a  few  gold  pieces,  by  authority  of  the  United  States 
and  the  principal  nations  of  Europe.  These  would  constitute 
a  universal  circulation.  They  could  be  easily  followed  by  the 
adoption  of  an  international  bank  note.  It  would  be  of  a 
universal  type  and  have  a  universal  purchasing  power. .  It 
would  have  currency  in  all  countries.  If  the  great  commercial 
nations  of  the  world  could  reach  that  stage  of  economics  where- 
in authority  could  be  conferred  upon  an  international  body  to 
issue  such  notes  upon  the  separate  and  binding  pledge  of  each 
nation  for  their  redemption,  those  notes  would  soon  have  cur- 
rency, even  among  nations  which  did  not  oflBcially  recognize 
them.  Their  commercial  use  would  compel  a  demand  for 
them,  in  spite  even  of  the  active  resistance  of  a  few  lesser 
nations.  The  disadvantages  arising  when  the  currency  of  one 
country  has  no  circulating  power  in  another,  are  quite  evident. 
The  currency  of  one  country  accumulating  in  another,  must 
be  remitted;  transportation  must  be  paid  for;  insurance 
premiums  must  be  paid.     The  foreign  bill  of  exchange  is  the 


228  DESCRIPTIVE  ECONOMICS. 

primitive  international  'bank  note.  For  centuries  it  has  acted 
in  the  settlement  of  balances  of  international  trade,  and  en- 
abled merchants  to  avoid  the  necessity  of  transportating  coin. 
Give  it  the  sanction  of  international  agreement  and  inter- 
national pledge  of  redemption  and  it  becomes  paper  money 
instead  of  money  paper. 


A    WORLD  ECONOMr  229 


CHAPTER  III. 
A  WORLD  ECONOMY. 

The  Preparations  for  it. — The  attempts  which  have  been 
made  to  solve  the  problems  referred  to  in  the  last  chapter,  are 
preparations  for  a  world  economy.  There  are  other  prepara- 
tions which  may  be  referred  to  more  by  way  of  suggestion, 
than  as  accomplished  facts.  The  various  national  economics 
are  now  the  units  of  economics.  The  economic  life  of  the 
people  of  the  United  States  under  its  independent  political 
organization  furnishes  a  national  economy.  It  is  the  same 
with  the  economic  life  of  the  people  organized  into  other 
political  units.  These  various  national  economics  do  not 
by  any  means  make  up  a  world  economy.  It  is  our  pleasure, 
however,  to  observe  how  they  are  growing  into  a  unity.  We 
may  profitably  do  so,  even  though  we  cannot  say  that  they  will 
ever  attain  that  unity. 

The  study  began  with  The  Economics  of  the  Family.  That 
is  the  title  of  the  first  part  of  the  work.  That  part  concerns 
the  economic  life  and  material  welfare  of  the  family  as  an 
economic  unit.  Passing  on  to  the  other  parts  of  the  book, 
economic  progress  is  seen  to  have  been  from  the  isolated  effort 
of  one  family  getting  a  living  by  itself — producing  all  its  wants 
by  the  labor  of  its  own  members,  bound  together  by  the  social 
ties  of  the  family  hearth,  or  more  frequently  by  the  family 
camp-fire,  through  the  isolated  village,  economically  independ- 
ent of  every  other  village,  and  then  through  the  city,  to  the 
nation.  The  nation  represents  many  families,  villages  and 
cities,  mutually  co-operating.  Getting  a  living  appears  to  be 
easier  with  each  advancing  stage.  Isolation  has  ceased  and  co- 
operation and  economic  dependence  have  taken  its  place.  This 
very  economic  evolution  is,  in  itself,  a  great  preparation  for  a 
still  higher  form  of  economic  activity.  What  shall  it  be?  It 
may  be  first  the  economic  co-operation  of  several  nations — like 


230  JDESCRTPTIVE  ECONOMICS. 

an  economic  union  of  the  Americas,  of  Europe,  or  the  nations  of 
Asia,  and  through  such  as  these  a  world  economy.  A  few 
specific  instances  of  preparation  for  a  world  economy  and  of 
changes  which  such  an  economy  necessitates,  may  be  singled  out 
and  mentioned  in  the  succeeding  paragraphs. 

International  Investments. — The  time  has  come  when 
English  money  is  no  longer  wholly  invested  in  England. 
Dutch  capital  is  not  confined  to  Holland,  nor  German  capital 
to  Germany.  American  stocks  are  quoted  in  all  the  great 
foreign  exchanges  as  habitually  as  home  stocks.  Dutch  bond- 
holders control  railways  in  the  United  States  as  well  as 
railways  in  Africa.  English  syndicates  control  some  of  the 
greatest  manufacturing  interests  of  the  United  States.  American 
capital  is  building  railways  in  Mexico  and  in  the  countries  of 
South  America.  It  is  no  longer  the  home  market  for  home 
money.  The  world  is  the  field  for  the  investment  of  capital 
and  for  the  capitalization  of  industrial  enterprises.  Indeed,  it 
is  frequently  the  case  that  a  foreign  investment  presents  greater 
allurements  to  the  capitalist  than  a  home  investment  of  the 
same  character.  The  distant  corners  of  the  earth,  where  the 
greatest  returns  can  be  had,  is  where  money  is  sent.  The 
stocks  representing  these  international  investments,  having  a 
market  quotation  at  national  monetary  centers,  are  fast  tend- 
ing to  take  the  place  of  gold  in  settling  balances  between 
nations.  As  mediums  for  the  settlement  of  differences  of  ex- 
change, the  stocks  have  the  advantage  of  gold,  because  their 
ownership  can  be  transferred  by  cablegram,  and  time  and 
space  are  annihilated. 

International  Labor  Organizations. — The  international 
organization  of  labor  may  not  yet  have  advanced  equally  with 
the  international  organization  of  capital.  Such  organization, 
however,  following  past  economic  growth  will  tend  to  follow 
hard  after  the  organization  of  capital,  even  to  treading  upon 
its  heels.  In  the  United  States  there  are  many  national  labor 
organizations,  such  as  those  of  the  miners,  the  iron  workers, 
the  cigar  makers,  and  railway  employes.  These  instances  are 
not  selected  because  they  represent  the  highest  type  of  national 
organization,   but  as  illustrations    simply.      These  national 


A    WORLD  ECONOMY.  231 

organizations  are  reaching  out  to  affiliate  with  European 
organizations. 

In  Europe,  international  organization  has  advanced  a  step 
higher.  The  International  Congress  of  Miners  first  met  at 
Jolimont,  Belgium,  in  1890.  Its  second  convention  was  in 
Paris  in  1891.  At  Westminister  in  1892,  delegates  were  pres- 
ent from  Germany,  Belgium,  France,  .  Austro-Hungary, 
England,  Scotland  and  Wales.  They  claimed  to  speak  for 
nine  million  miners,  and  the  congress  placed  its  objects  on 
record  as  follows:  "  To  bring  together  the  mining  nationalities 
of  the  world;  to  limit  the  hours  of  under-ground  labor  to 
eight;  to  obtain  legislation  for  the  proper  supervision  and  in- 
spection of  mines,  including  some  inspectors  to  be  elected  by 
the  miners  themselves."  As  these  lines  are  written  (April, 
1893),  a  congress  of  international  workers  is  called  to  meet  at 
Zurich  in  May,  1893.  The  tendency  to  international  co- 
operation is  a  crucial  distinction  between  the  gild  system  of 
the  middle  ages  and  the  labor  organization  system  of  modern 
times.  There  was  little  union  or  co-operation  among  the  gilds. 
Each  gild  was  for  itself  and  under  the  control  of  the  industry 
of  the  town. 

International  organization  of  capital  will  compel  and  beget 
international  organization  of  labor,  but  there  is  another  reason 
for  larger  labor  organization.  It  is  the  world  market  of  the 
day.  More  extended  reference  will  be  made  to  this  under  the 
head  of  International  Transportation,  following.  In  this  con- 
nection, however,  its  influence  upon  labor  requires  a  word  or 
two  of  illustration.  There  was  a  time  when  the  Eastern 
States  furnished  the  market  for  eastern  mined  coal.  As  long 
as  that  state  of  affairs  continued,  a  miners'  organization  em- 
bracing the  territory  included  in  the  market,  answered  the 
purposes  of  the  men  fairly  well.  But  that  condition  of  things 
has  passed.  The  Eastern  States  are  no  longer  the  market  for 
eastern  mined  coal.  The  Eastern,  Middle  and  Western  States 
are  so  closely  and  intimately  connected  by  great  trunk  rail- 
ways, that  no  mine  can  be  said  to  possess  a  local  market.  The 
whole  country  is  the  coal  market  for  all  the  coal.  To  render 
organization  effective,  the  miners  have  found  that  there  must 


232  DESCRIPTIVE  ECONOMICS. 

be  national  organization.  Whatever  good  has  resulted  from 
the  payment  of  wages  based  on  a  sliding  scale,  has  come  out  of 
national  organization.  It  would  be  of  no  possible  use  for  the 
ironworkers  of  Pennsylvania  to  enter  into  an  agreement  with 
their  employers  for  the  payment  of  wages  based  on  the  selling 
price  of  iron,  so  long  as  their  iron  must  compete  in  the  market 
with  the  iron  of  all  the  other  States,  unless  wages  were  paid 
elsewhere  on  the  same  basis.  The  employers,  too,  have  found 
that  a  universal  wage  system  based  on  a  sliding  scale  according 
to  the  selling  price  of  iron,  has  been  not  without  benefit  to 
themselves.  In  the  memorable  iron  panic  of  1880,  the  selling 
price  of  iron  fell  fifty  per  cent,  within  the  period  of  four  weeks. 
According  to  the  scale  in  force  throughout  the  country,  the 
wages  of  ironworkers  every  where  fell  fifty  percent,  accordingly. 
There  was  little  or  no  trouble  or  clash  between  employe  and 
employer.  In  no  other  way  could  the  employers  have  reduced 
the  wages  of  their  employes  fifty  per  cent,  within  that  period, 
so  as  to  meet  the  corresponding  fall  in  the  selling  price  of  iron, 
without  precipitating  conflicts. 

International  Transportation. — Perhaps  a  more  express- 
ive headline  would  be  "  The  World  Market."  Before  trying  to 
tell  what  it  is,  let  us  see  how  it  has  sh6wn  itself.  The  hop 
market  of  the  east  is  not  regulated  by  the  hop  crop  of  New 
York;  nor  is  the  hop  market  of  the  west  fixed  by  the  crop  of 
Oregon  or  Washington.  The  crop  of  every  section  of  every 
state  has  something  to  do  with  fixing  the  price  of  hops  for  the 
American  continent,  but  it  is  only  a  factor  after  all.  The  crop 
of  England  or  Germany  has  just  as  much  to  do  with  the  mak- 
ing of  the  price.  The  crop  of  every  section  of  every  country  of 
the  earth  governs  the  price  of  hops.  The  same  thing  is  true 
with  all  agricultural  products.  It  is  true  also  as  to  all  staple 
manufactures.  The  combined  product  of  the  world  regulates 
the  market,  and  the  world  is  the  market  of  every  farmer  and 
of  every  manufacturer.  Dakota  wheat  is  mixed  in  Liverpool  bins 
with  Eussian  and  Indian  wheat.  Ohio  mutton  hangs  side  by  side, 
in  London  stalls,  with  frozen  mutton  from  Australia.  Adam 
Smith  told  the  English  farmers,  not  long  ago,  that  they  never 
need  fear  competition  in  the  production  of  »  commodity  like 


A    WORLD  ECONOMY.  233 

beef,  because  of  the  difficulty  of  transportation.  The  beef 
production  of  England  has,  now,  hardly  anything  to  do  with 
fixing  the  price  of  beef  there.  The  introduction  and  use  of 
great  i-efrigerator  compartments  in  ships  has  truly  made  the 
whole  world  the  market  for  the  beef  of  every  farmer. 

The  evolution  of  transportation  is  responsible  for  this  state 
of  affairs.  Fast  lines  of  steamships  bring  all  parts  of  the  globe 
into  communication.  They  have  facilities  for  transporting  all 
products.  The  Suez  canal  went  a  long  way  toward  furthering 
the  world  economy.  A  Nicaragua  canal  may  some  time  do 
even  more.  Railroad  building  in  Africa  points  toward  con- 
necting the  Indian  ocean  with  the  Atlantic.  The  great  trans- 
Siberian  railroad  will  connect  Europe  with  the  Pacific.  The 
inhabitants  of  the  Western  portion  of  the  United  States 
may  soon  find  it  more  speedy  or  convenient  to  reach  Europe  by 
sailing  westward  and  crossing  Siberia.  It  is  not  simply  the 
existence  of  international  transportation,  however,  which  forms 
a  preparation  for  a  world  economy.  It  is  also  the  cheapness  of 
such  transportation.  It  has  been  cheapened  until  products  of 
local  manufactures,  which  formerly  had  no  commercial  value, 
can  be  utilized  in  other  countries,  and  have  thereby  become  of 
great  revenue.  Natural  products  which  once  went  to  waste 
are  utilized  in  other  parts  of  the  globe. 

Intercommunication. — Internationa,  transportation  has 
had  the  effect  of  increasing  communication  between  nations. 
Intercommunication  by  individuals  results  finally  in  closer  re- 
lations between  governments.  International  comity  has  hither- 
to been  of  a  political  rather  than  of  an  economic  character. 
The  future  of  international  co-operation  for  economic  purposes, 
however,  may  be  considered  as  fairly  outlined  by  the  Interna- 
tional American  Conference  which  convened  at  Washington  in 
October,  1889.  The  professed  object  of  the  conference  was  to 
devise  "some  plan  of  arbitration  for  the  settlement  of  disagree- 
ments and  disputes  that  may  hereafter  arise,  and  for  consider- 
ing questions  relating  to  the  improvement  of  business  intercourse 
and  means  of  trade  intercommunication  between  the  said  coun- 
tries, and  to  encourage  such  reciprocal  commercial  relations  as 
will  be  beneficial  to  all,  and  to  secure  more  extensive  markets 


234  DESCRIPTIVE  ECONOMICS. 

for  the  products  of  each  of  said  countries."  To  this  conference 
the  governments  and  republics  of  Mexico,  Central  and  South 
America,  Haiti,  San  Domingo  and  Brazil  were  invited.  Con- 
ferences for  the  discussion  of  international  economics  are  likely 
to  be  more  frequent  in  the  future.  As  the  German  economist 
Roscher  says:  "  Where  the  feeling  that  all  mankind  constitute 
one  vast  family,  is  stronger  than  that  of  their  political  and  re- 
ligious diversity;  where  the  sense  of  right  and  the  love  of  peace 
have  extinguished  every  dangerous  spark  of  ambition  for  em- 
pire and  all  warlike  jealousy;  where  especially,  their  economic 
interests  are  rightly  understood  on  both  sides,  a  real  conflict 
between  the  interests  of  two  nations  must  always  be  a  phenome- 
non of  rare  occurrence  and  an  exception  to  the  general  rule, 
which  should  not  be  admitted  until  it  has  been  clearly  demon- 
strated to  exist." 

International  Arbitration. — There  is  greater  love  of  peace 
and  greater  toleration  among  nations.  Peace  conquers.  The 
result  of  the  court  of  arbitration  upon  the  Alabama  Claims  ap- 
pears to  have  been  a  signal  and  salutary  lesson  in  favor  of  in- 
ternational arbitration.  The  practical  utility  of  such  courts 
was  then  demonstrated.  Since  that  time  arbitration  for  the 
settlement  of  international  disputes  and  differences  has  steadily 
grown  in  favor.  The  settlement  of  the  Behring  Sea  dispute 
between  England  and  the  United  States  by  the  court  of  arbi- 
tration which  met  at  Paris  in  the  summer  of  1893,  proved  the 
continued  growth  of  the  principle  of  arbitration.  In  August, 
1892,  the  first  International  Peace  Congress  assmbled  at  Berne. 
All  the  great  powers  were  represented.  A  permanent  Interna- 
tional Peace  Bureau  was  established.  An  International  Arbi- 
tration Court  was  instituted,  Berne  to  be  its  convening  place. 
It  adjourned  to  meet  at  Chicago  during  the  International  Col- 
umbian Exposition.  International  law  is  gradually  but  surely 
approaching  a  higher  codification,  and  with  an  International 
Court  to  apply  it,  a  court  to  whose  decisions  the  great  powers 
shall  have  pledged  fidelity  and  obedience,  international  war 
will  be  practically  abolished.  International  arbitration  for  the 
settlement  of  quarrels  is  then  substituted  in  place  of  war.  In- 
ternational economics  must  be  correspondingly  advanced. 


A    WORLD   ECONOMY.  235 

International  Religious  Movements. — According  to  a 
conception  of  economics,  widely  diffused  in  recent  times,  ethics 
is  an  important  economic  factor.  Political  economy  was  for- 
merly considered  the  science  of  driving  a  good  bargain.  Self 
interest  was  supposed  to  control  men  in  all  their  dealings  with 
each  other.  It  was  supposed  to  define  and  characterize  all 
economic  activity.  Selfishness  was  the  beginning  of  all  eco- 
nomic law.  So  called  laws  of  supply  and  demand  were  held  to 
govern  all  economic  activity,  and  ethics  had  nothing  to  do  with 
it.  According  to  old  doctrines,  some  men  were  born  to  be 
laborers,  and  some  to  be  capitalists,  and  a  social  gulf  must  neces- 
sarily intervene  between  the  .two  classes.  Each  class  must  for- 
ever keep  on  protecting  its  class  interests  and  fighthig  the  other 
class.  In  recent  times,  however,  there  are  those  who  advocate 
that  economics  teaches  how  there  may  be  progress  from  lower 
to  higher  ethical  conditions;  how  things  may  and  ought  to  be 
better;  "that  in  the  general,  peaceful  pursuit  of  economic 
wellbeing,  we  have,  in  civilized  nations,  only  recently  reached 
an  ethical  goal  longed  for  by  the  best  for  many  generations," 
and  "  ethical  purposes  for  the  future,  exist  now  as  they  have 
always  existed,  and  they  will  mould  our  economic  life." 

Ethics  inculcates  higher  standards  of  material  welfare.  It 
aims  to  develop  the  social  side  of  economics,  and  to  mould 
economic  life  according  to  ethical  standards.  It  advocates  a 
universal  industrial  peace  and  co-operation.  It  believes  that 
the  laborer  is  worthy  of  his  hire,  and  that  all  men  are  laborers. 
According  to  the  ethical  idea  of  economics,  religion  would  substi- 
tute the  promotion  of  neighborly  and  brotherly  welfare,  in  place 
of  self  interest.  In  the  words  of  one  of  its  advocates:  "An  eco- 
nomic world  union  of  brothers  is  in  process  of  formation,  and 
this  explains  a  large  part  of  our  anxiety  and  uneasiness  with 
respect  to  social  conditions.  It  is  of  no  avail  to  say  that  busi- 
ness is  excluded  from  the  domination  of  ethical  principals,  for 
it  is  precisely  in  our  economic  life  that  ethical  principles  of  any 
real  validity  must  manifest  themselves.  It  is  only  in  an  im- 
perfect condition  of  society  that  sharp  practice  and  hard  bar- 
gaining can  ever  appear  to  men  to  be  morally  right.  There  is 
a  very  general  determination  to  make  all  departments  of  social 


:i36  DESCRIPTIVE  ECONOMICS. 

life  to  conform  with  ethical  principles,  and  that  is  what  is 
meant  by  the  phrase  used  by  the  Christian,  *the  world  is  the 
subject  of  redemption.' "  The  World's  Parliament  of  Religions 
in  connection  with  the  International  Columbian  Exposition,  is 
in  line  with  the  introduction  of  ethical  principles  into  eco- 
nomics. It  is  by  such  conferences  that  men  can  be  brought  to 
believe  that  mankind  constitutes  "one  vast  family;"  that  the 
economic  nation  is  only  an  undivided  part  of  one  great  whole, 
not  yet  brought  into  relation,  but  existing  in  embryo. 


i:^DEX. 


PAQK. 

Africa,  lack  of  wants  in  affect- 
ing economic  progress 49 

capital  in 51 

Agricultural    life    supplanting 

pastoral  life 63 

stages 67-70 

Agriculture,     beginning     and 

growth  of 64,  66,  67 

its  economic  signilicance 63 

enlarging  sources  of  subsist- 
ence  70-71 

producing  victory  over  nature    70 
commerce  and  manufactures, 

CO  operation  of 139 

Alabama  claims,  arbitration  of  234 
Allen,  Grant  on  economic  strug- 
gles of  animals 20 

Amalgamated  scale 165,  232 

Anarchism --  169 

Animal  domestication 40-46 

Animal  propagation,  rate  of  in- 
crease   175 

Animals,  economic  struggles  of 

....20-22 

and  changeful  surroundings.     21 

family  life  of 29 

gregariousness  of 29 

economic  co-operation  among    30 

industrial  society  of 30 

number  of  indigenous  affect- 
ing pastoral  life 42 

domestic,  distribution  of.. .42-43 

newdomestic 43 

hoarding  capital. 51 

domestic,  barter  in... 56 

Ants,  industrial  society  of 30 

subsisting  on  aphides 30-31 

Apprentices,  Elizabethan  law  of  162 


PAGE. 

Arbitration,  between  capital  and 

labor 162-163 

between   capital   and   labor, 

steps  in  growth  of 163 

court,  an  international 234 

international 234 

Arkwight's  loom  revolutioniz- 
ing textile  industry 162 

Army  and  navy  a  public  monop- 
oly   148 

Artificial  monopolies 149 

Artisan  class,  beginning  of 117 

Artisans,  in  village  stage 88-117 

significance  of  appearance  of  117 
Australian  tribes,  common  prop- 
erty in  game  among -     52 

Autonomous  producing  class..  125 
Avocation  of  the  family  stage..    49 

B. 

Balance  of  trade  theory 211-213 

Bank  notes  as  promises  to  pay. 

190,  195 

convertible 195 

Bank,  functions  of 203 

Banks  and  banking,  general  dis 

cussion 203-206 

savings 204 

of  deposit ....204,  205 

Barter  in  family  stage 55-57 

in  game.- - 55 

in  domestic  animals 56 

in  weapons 56 

discouragements  of  in  family 

stage 57 

Bi-metalism,  definition 199 

self -regulating 202,  203 

and  free  coinage 203 


337 


238 


INDEX. 


PAGE. 

international 203 

Bison,  domestication  of 43 

Borneo,  economic  life  in 36 

Boycotts  as  one  of  the  evils  of 

labor  organization 160 

Burghers  and  the  artisans,  con- 
test between 118  et  seq. 

and  the  trading  privilege 113 

as  the  land-holding  class.. 112-113 
Burgess-ship,  right  of  described  112 

as  affecting  city  economy.  112, 113 

C. 

Cameron,  disadvantage  of  truck 
economy 93 

Carniverous  plants,  struggle  for 
existence  among 19 

Cannibalism  caused  by  lack  of 
subsistence. 71 

Capital,  aggregations  of , demand 

economic  study 15 

accumulation  by  animals 51 

of  the  nomad 51 

of  the  family 51-54 

community  of 52 

progressive  forms  of 52 

reasons  for  community  of  in 

primitive  societies 53 

increase  of  in  village  stage. . .     91 
co-operating  with  land   and 

labor 136-137 

definition 137 

use  of  distinguishing  primi- 
tive and  modern  producer.  137 

modern  aggregations  of 144 

organization  of 144-151 

freedom  of  in  national  stage. .  147 
and    labor,    division    of    the 

product 155-156 

and  labor,  the  quarrel  illus- 
trated  156 

and  labor,  union  of 161 

international  organization  of.  280 


PAOB. 

Chaffaujou  M.,  describing  Gua- 

haribo  Indians 86 

Chinese  exclusion 224 

Cattle  money 95 

Cities,  rise  of 101 

formed  by  economic  concen- 
tration   102 

influence  of  trade  in  building  103 

rise  of  maritime 103 

rise  of,  conditioned  by  good 

roads 104 

sites  of,  natural 106 

Civil  authority  exercised  by  land 
holding  class  in  city  stage.  113 
authority  of  merchant  gilds.  115 

City,  economics  of 101-133 

and  town,  distinction 102 

modern   and   medieval   con- 
trasted  Ill,  136 

the  medieval,    the  exponent 

of  city  economics 112 

commerce  of,  and  merchant 

gilds 113-116 

control  of  trade  in 116, 132,  210 

economic  supremacy  of 132 

Citizenship,  modern  and  medie- 
val contrasted 123 

Class,  the  landless 121 

divisions,    modern ..124^126 

distinctions  fixed  in  city  stage  133 
Classes,  distinguished  by  posses- 
sion of  land 113 

merchant  and  artisan,  origin 

and  growth .118-120,  123 

in  communal  life 121 

the  economic 121-126 

caused    by  differentiation  of 

crafts 124 

distinguished  from  castes 126 

Clearing  house,  the 205-206 

Climate,  diversity  of  in  United 

States 16 

Clothing  as  a  necessary  want. .     22 
and  shelter  of  the  family  stage    48 


INDEX. 


239 


PAGE. 

Coinage  of  money,  function  of 

government  in 131 

a  public  monopoly 148 

fineness  of 201 

international 227 

Coins,  international 227 

Colbert,  plan  to  increase  popu- 
lation..  223 

Collectivism,  see  Socialism 
Columbia  river  valley  a  center 

of  population 60 

Comforts,  their  relation  to  life  13,  26 
distinguishing  man  from  low- 
er animals 24 

Commerce  and  the  rise  of  cities 

104,  132,  139 

intermunicipal,  regulation  of  116 
co-operation  of,  with  agricul- 
ture and  manufacturing..  139 
international,  general  discus- 
sion   207-222 

evolution  of 208 

See  also  Trade 
Commercial    regulations    com- 
mencing    with     merchant 

gild 116 

regulations,  evolution  of. 209-211 
Communal  Iife,devoid  of  classes  121 
Communication  international.-  233 
Communism,  see  Socialism 
Community  of  capital  in  fam- 
ily stage 52 

of  living  in  family  stage....     59 
Competition  of  natural  monopo- 
lies   150 

Connecticut,  taxes  paid  in  cows  193 
Conquest  giving  rise  to  classes 

121-122 

Convertible  notes 195,  197 

Cookery,  nomadic 47 

Co-operation  in  the  satisfaction 

of  wants 26 

among  animals 30.  31 

of  the  three  factors. 136-138 


PAOB. 

between   employer   and  em- 
ploye  162-164 

Corporations  and  organization 
of  capital 145 

evils  of 145 

Courts  of  arbitration 234 

Craft  gilds 118-120 

Craftsman,  the 117-120 

contest  with  landholding  class  123 
Crafts,  differentiation  of,  form- 
ing classes 124 

Credit  commercial 182 

economy 182 

system,  affecting  amount  of 

money  needed. 188 

Criminals,  kinds  of 224 

Currency,  fluctuation  of 194 

international 227 

volume  of 193 

See  also  money 

Customs  laws 213 

Curumbus  of  India 36 

D 
Debased  coinage 193 

Descriptive  economics,   defini- 
tion   -     12 

objects  of 12 

Diminishing  returns,  law  of 178 

Distribution  of  commodities  in 

village  stage 99 

Division  of  employments,   see 
Employments 

labor ...-171,  173 

See  also  Employments 
employments   accompanying 

community  life.. 81 

products  in  village  stage 88 

Domestication  of  animals 40-46 

animals  for  food. 41 

animals  for  transportation 41 

animals  for  agricultural  pur- 
poses      42 

animals  for  the  hunt 40 


240 


INDEX. 


E. 

PAGE. 

Economic  knowledge,  definition     8 

activity,  definition 11 

Economics,  definitions 10,  28 

descriptive,  nature  and  objects    12 

relation  to  other  studies 12 

Economic  knowledge,  practical 

nature  of 14 

reasons  for  a  wide  diffusion 

of ..14-18 

Economic  functions  of  the  state, 

growth  of. 17 

Economics  of  the  family,  defini- 
tion     30 

Economic  isolation  distinguish- 
ed from  territorial 33 

Economics  of  family  contrasted 

with  economics  of  village.    64 
Economic  stages,  first  and  sec- 
ond compared 64 

Economic  dependence  in  village 

community  life 73 

Economics,  derivation  of 87 

Economic  isolation  of  village..     99 

disadvantages  of 93-94 

Economics   of  city    in    North 

America 105 

international,  general  discus- 
sion  207-236 

Economic  classes,  in  city  stage, 
distinguished  by  landholding 
and  right  of  burgess-ship-112-114 

origin  of  artisan  class 117 

See  also  artisan  class 
origin,  divisions  and  growth 

of 121-126 

Economy,  truck,  in  village  stage    89 

of  the  city,  beginning  of 101 

of  the  medieval  city 111 

of  the  nation  governed  by  na- 
ture   138 

Economic  dependence  arising 
from  division  of  employ- 
ments   172-173 


PAGB. 

Economics  of  population,  gen- 
eral discussion. 174-179 

and  ethics 235-236 

Economic  conditions  affecting 
amount  of  money  a  nation 

needs 187 

Economy  of  credit 182 

a  world 229 

Ethics,  place  in  economics 235 

Employe  class,  organization  of 

151-152,  157 

Employer  and  employe  class, 

origin 124 

and  employe  class,  described  125 
and  employe,  profit  sharing.  163 

Employers,  coalitions  of. 155 

Employments,  division  of,  ac- 
companying    agricultural 

community  life 81 

in  village  stage. 87 

of  the  family  stage 49 

differentiation   of,   following 

rise  of  artisan  class...  117  et  seq. 
division  of,  general  discussion 

170-173 

growth  of  division   of _  170 

advantages  of  division  of 171 

disadvantages  of  division  of 

172-173 

Exchange   of  commodities,   in 
village  stage 98 


Factory  laws,  secured  by  labor 

organization 159 

Fairs  and  markets 108-109 

ancient  origin  of 109 

Family  the  isolated  illustrated.     32 
the  human,  the  beginning  of 

industrial  society 32 

the    isolated,    beginning    of 

economic  study 32-34 

capital  of 51-54 


INDEX. 


241 


PAGE. 

the  economic,  definition 54 

barter 55-57 

the    economic    distinguished 

from  ethnological-. 54 

economics  compared  with  vil- 
lage economics 64 

Famines  in  hunter  state 39 

in  pastoral  state 45 

Farming,  the  revolution  in 181 

Fishing  and  hunting  stage, ... 37-39 

Fisher  before  hunter 37 

the  primitive  and  modern  con- 
trasted  137 

Fineness  in  coinage 201 

Fijians,      inter-island       barter 

among 110 

Food  as  a  necessary  want 19 

the  struggle  for  among  plants, 

animals  and  men 19-21 

corresponding  to  the  econo- 
mic state 21-22 

and    the    ascending    scale..    22 

of  nomadic  life. 47 

Franklin  Benj.  three  ways  of 
acquiring  national  wealth.  139 

Free  coinage 203 

Free  trade,  general  discussion. 

.213-222 

definition  of .213-214 

arguments  for 214-218 

inland 142 

Frugiferous  subsistence. 35 

state  and  restricted  habitat..    36 

Fruit  subsistence 35-36 

Fuegians,  fishing  appliances  of  181 
Furmoney 95 

G. 
Game,  barter  in 55 

common  property  in 52 

subsistence 38 

Ganges,  valley  of,  a  center  of 
population 174 

Genoa,  in  city  economics 104 

16 


PAGE. 

prosperity  of  and  the  balance 

of  trade  theory 211 

Gilds,  the  craft 118-120 

the  merchant 114-116 

medieval,  distinguished  from 
modern  labor  organizations  151 
Gold,  distribution  and  produc- 
tion of 199 

and  silver,  ratio  of,  in  coin- 
age  199,  200 

Government,    function    of    in 

coining  money -- 131 

power  to  create  money...  191-192 

Grain  money 95 

Gregariousness  of  animals 29 

Greenbacks,  as  promises  to  pay  191 

Gresham'slaw 193-203 

Guiot,  Yves,  on  relations  of  mas- 
ter and  journeymen 160 

H. 
Habitat,  enlargement  of  by  agri- 
culture      70 

enlargement  of  by  shepherd- 
ing an d  pastoral  life 44 

restricted  in  frugiferous  state    36 

enlargement  of  in  hunter  state    88 
Harbors   causing   location    of 

cities 103 

Hanse,  see  merchant  gild... 114-1 16 
Health  boards,  international...  226 
Health,  international 224 

public  boards  of 225-226 

Himadryad  baboons,  economic 

co-operation  among 30 

Hunter's  subsistence 38 

Hunting  and  fishing  state 37-39 

with  animals 40 

I. 
Inconvertible  paper  money. 196-198 
Indians,  American,   abstinence 

from  food 23 

Indian  money 96 


242 


INDEX. 


PAGE. 

Industrial  society,  definition...      9 

its  extensiveness 10 

growth  in  United  States  de- 
manding  wide    diffusion  of 

economic  knowledge 17 

controlling    satisfaction     of 

wants 26 

of  animals 80 

tndustrial  stage  of  economics 
- 185-139 

Industrial  democracy 167,  168 

Industrial    revolution,   general 

discussion 180-183 

in  farming 181 

in  manufacturing 182 

its  historical  meaning 183 

Industry,  modem  changes  in. 15,  16 

Infanticide  caused  by  lack  of 
subsistence 71 

[nland  cities  caused  by  concen- 
tration of  village  economy...  104 

International  economics 207-236 

International  health 224-226 

investments 230 

labor  organizations 230-232 

transportation 232-233 

communication 233 

arbitration 234 

religious  movements 235 

Invention,  beginning  of 61 

progress  by,  intermittent 183 

Isolated  family  the   economic 
unit 32-84 

Isolation,  territorial   and   eco- 
nomic compared 88 

J. 

Jevons,  W.  8.,  disadvantages 
of  truck  economy 93 

Journeymen  and  masters,  rela 

tions  of 151 

separated   by   possession   of 
capital 156 


PAQB. 

Journeymen  their  relations  to 

the  master  described 160 

Jural  organization  affecting  na- 
tional economy 138 

K. 

Kane,  Dr.,  description  of  fam- 
ine at  Etah 89 

Kettle,  Rupert,  system  of  arbi- 
trating labor  disputes .'.  163 

Knights  of  labor  illustrating 
growth  of  labor  organization  154 

Knights  of  labor  and  separate 
organization  of  industries 155 

Knights  of  labor,  aims  of...  158-159 

L. 

Labor    organizations,     advan- 
tages of. 159 

evils  of 160 

international 280-282 

Labor  and  capital,  union  of 161 

Labor  legislation,  to  unite  cap- 
ital andlabor 161 

Labor  organization  a  reasbn  for 

economic  study 16 

systematized   with   introduc- 
tion of  landed  property 80 

Laborers     serving    for     fixed 

wages  in  village  life 81 

Labor  question,  origin 120-124 

ever  present 153 

Labor,  co-operating  with  land 
and  capital. .136,  137,  UQet  seq. 
organization  of   in   national 

stage 151  etseq. 

modern  and  medieval  condi- 
tions of  compared 152 

Labor,  greater  efficiency  of  in 

later  economic  stages 177 

Landed  property  among  animals    79 

among  nomads 79 

economic  significance  of 80 


INDEX. 


243 


PAGE. 

evolution  of 82 

Land,  collective  ownership 

82,84,122 

periodical  allotment  of  use ...    82 

tenure  holding  of 83,  122 

freehold  in. 84 

transfer  of,  Torrens  system..  84 
property  in,  in  family  stage..  60 
organization  of  giving  rise  to 

classes 113,  121-123 

distribution  of  in  village..  113,  122 

meaning  of  in  economics 137 

and    craftsmen,    contest   be- 
tween   - 123 

labor  and  capital,   co-opera- 
tion of  in  national  stage... 

136-137 

labor  and  capital,  relations  of, 
causing     social     economic 

problems 140 

public  or  private  ownership 

of 141,  142 

nationalization 141 

Landholders,  the  citizen  class 

113,  123 

Lasalle,  Ferdinand,  law  of  wages  153 

Latin  monetary  union 201,  227 

Law  and  order  as  factors  in  in- 
dustrial development 105 

influence  of,  on  economic  de- 
velopment   105 

Legal  security,  lack  of,  affecting 
development  of  trade.. 105,  108 

Lejeune,  Indian  legend 39 

Legislation  lo  unite  labor  and 

capital 161 

Letourneau  on  community  of 

capital 52 

Lock-out,  the 155 

Lombard  street   jewelers  first 

bankers 204 

London  once  a  village  commu- 
nity  104 

flist  bankers  of 204 


M. 

PAOK. 

Machinery,  use  of  in  case  of 

profit  sharing 164 

MacAdam,  alphabet  of  finance.  201 
Man  distinguished  from  animals 

by  wants 24 

distinguished    from    animals 

by  struggle  for  food 20-22 

Manufactures  of  village  stage..     92 

of  family  stage 58 

growth  of  from  village  stage . 

117,132,139 

Maritime  cities,  rise  of 108 

trader,  characteristics  of 106 

Markets  in  village  stage 108 

Market,  the  world 208,  232 

advantages     of     with     free 

trade 815 

Master  and  journeyman 

151,156,160 

Malthusianism 174 

Marine  telegraphy 188 

Medieval     city     distinguished 

from  modern Ill 

Mediterranean,  the,  a  factor  in 

city  economics 103 

Medium    of   exchange,   higher 
qualities  of,  with  advancing 

civilization.. 128 

Mercantilists,  the 211 

Merchant   class  in  city  stage, 

controlling  trade 113,  182 

Merchant  gilds,  objects  of 114 

membership  114 

organization 115 

civic  authority  of 114 

practical  lessons  of 115-116 

and  artisan  classes,  origin. 118-120 

Metals,  precious,  as  money 131 

Mexico,  valley  of,  a  center  of 

population 60 

Pueblos  of,  as  a  city 105 

fairs  in... 110 

Middens  kitchen..,.., 87 


244 


INDEX. 


PAGE. 

Michigan,   lower,   a  center  of 

population 

Migration,  international 223-224 

of  paupers  and  criminals. 223-224 

of  Chinese 224 

Milk  and  meat  subsistence 44 

Money,  first  forms  of... 93,  127,  128 

cattle 95 

grain 95 

fur 95 

wampum 96 

the  common  third  medium  of 

exchange 127-131 

and  rise  of  trade 127 

advantages  of  precious  metals 

for .---  128 

economy,  significance  of 129 

four  functions  of  .  - 129 

government  coinage  of 131 

precious  metals  as 131 

of  the  nation,  general  discus- 
sion  185  ei  seq. 

functions  of 185 

amount  a  nation  needs 186 

place  in  commerce  illustrated  186 
amount  needed  depending  on 

economic  conditions 187 

amount  needed  depending  on 

credit  system 188 

amount  self-regulating 189 

amount  needed  for  wages...  190 

paper,  character  of 190 

paper,  amount  which  will  cir- 
culate depending  on  confi- 
dence    191 

paper  as  a  creation  of  govern- 
ment  191-192 

function  of   government   in 

creation  of 192 

paper,  advantages  and  dan- 
gers of 192-193 

paper,  volume  of 193-194 

fluctuation  in  volume  of.. 194-195 
convertible  bank  notes...  195-197 


PAGE. 

paper,  who  should  issue ..196-197 
the  superior  drives  out   the 

inferior 193,  202 

international 226-228 

Monometallism 199,  203 

Monetary  union,  the  Latin.. 201,  227 

Monks  of  medieval  Europe,  in- 
fluence of  upon  industrial 
development 105 

Monopolies  distinguished  from 
corporations 147 

•    kinds  of 148 

public 148 

private 148 

natural 149 

public  control  of 149-151 

artificial 149-150 

competition  of  natural 150 

ownership  of 151 

Mundella's  courts  of  arbitration 
for  settling  labor  disputes. .  163 

Municipal  economy,  in  the  east  112 

of  medieval  Europe Ill,  113 

summary  of 131-133 

Municipalization  of  land 143 

N. 

Narragansetts,  money  of 90 

Natural  monopolies 149 

Nationalism  and  tariff  regula- 
tions  217,  219 

economy    and    physical    en- 
vironment    143 

Nation,  the,  definition  of 135 

the  economic  185 

Nature,  conquest  of,  following 
introduction  of  agriculture    70 
resistance  of  in  family  stage.    59 
subjection  of  in  village  stage.    97 
external,  as  a  factor  in  eco- 
nomic activity 136-138 

governing  national  economy 
138,143 


INDEX. 


245 


PAGE. 

Nationalization  of  land 141 

Necessary  wants  of  man 19 

Negroes  of  the  south,  lack  of 

wants 50 

Nile,  valley  of  a  center  of  pop- 
ulation   60 

Nomadic  life  superseded  by  vil- 
lage community  life 73 

horde  an  economic  family 54 

economic  life 47 

cookery. 47 

Nomad,  capital  of 51 

Nomads,  landed  property  of. . .  79 

Normal  wages 15S-154 

O. 

Organization  of  trade 113-116 

of  merchant    class,  see  mer- 
chant gild 
of  artisan  class,  see  craft  gild 

of  industry,  in  city  stage 132 

Organizations,    labor,    general 
statement  of,  advantages  of  159 

P. 

Paper  money,  character  of 190 

See  also  Money, 
amount  of  which  will  circu- 
late   depending   on   confi- 
dence in  government 191 

when  at  a  discount 191 

advantages  and  dangers  of. .  192 

volume  of 193-194 

one  function  of 196 

inconvertible 196-198 

who  should  issue 196 

Pastoral  state 40-46 

subsistence  of 44 

famines  of 45 

Pauper  class 125-126 

Pauperism 223 

Penology 224 


PAOB. 

People  in  frugiferous  state 86 

Peru,  illustrating  land  and  labor 

without  capital 140 

Physical   environment  control- 
ling national  economy 143 

Piece  work,  affecting  relations 

of  employer  and  employe.  164 
Pioneer  life  similar  to  village 

community  life 89 

Plants,  carnivorous,  economic 

struggles  of 19 

Professional  class,  the 125 

Political     economy,     common 

term  for  economics 11 

See  also  Economics 
Political  growth,  a  reason  for 
dififusion      of      economic 

knowledge 14 

Population,  early  centers  of...    60 
checking  growth  of,  in  primi- 
tive society 71 

Malthus',  law  of 174 

economics  of,  general  discus- 
sion   174-179 

rate  of  increase  illustrated  by 

increase  of  animals 175 

checks  on  increase 175 

plan  to  increase 223 

Precious  metals,  advantages  of, 

for  money 128 

Prehistoric  sources  of  subsist- 
ence      36 

Private  monopolies. 148 

Profits,  division  of,  village  stage    88 
Profit  sharing  between  employer 

and  employe 163 

Property,    community   of,    in 

weapons  and  game 52-53 

reasons  for  community  of,  in 

primitive  society 53 

growth  of  private  ownership    99 
Protection,  general  discussion 

213-222 

and  robbery 216,  220 


346 


INDEX. 


PAGE. 

argumeDts   for   and    against 

214-221 

Protective  tariffs 218 

Public  monopolies 148 

control  of 149 

Pueblo  of  Mexico  as  a  city 105 

R. 

Railroads,  natural  monopolies.  149 
Rate  of  increase  of  population 

-- 174-179 

of  lower  animals 175 

Ratio  in  coinage,  definition 199 

flxingthe 199 

fluctuation  of 200 

Ratios,  the  European 201 

the  United  States 201 

Raw  products  handled  by  early 

traders 108 

Relief  societies,  labor  organiza- 
tions as... 159 

Returns  diminishing  in  product- 
ive enterprises 178 

Roads,  influence  of  upon  indus- 
trial development 104 

Robbery,  discouraging  trade..  108 
Rome,  in  city  economics 104 

S. 

Sanitation,  systems  of 225 

public 225-226 

Saturnian  age  in  economics 61 

Savings  banks 204 

Scale    system    in  payment    of 

wages 165.  232 

Seas  and  rivers  as  avenues  of 

progress 87 

Serfdom,  origin  of 85,  86 

Serf,  condition  of 86 

Shelter  as  a  necessary  want  ...  22 
Shell  mounds  of  fisher  state...  37 
Been,  the,  and  unseen 183 


PAGE. 

Silver  question,  the 198 

production  of 199 

ratio  with  gold  in  coinage. 200-201 

Slavery,  development  of 85 

Social  economic  problems 140 

Socialism  and  communism. 166-169 

Socialism,  objects  of 166 

distribution  under 167 

theory  and  practice  of 168 

Society,  industrial,  definition..      9 

extensiveness 10 

of  animals 29-30 

Source  of,  subsistence  in  frugif- 

erous  state 35-36 

in  hunter  state 87-39 

Standard  of  life  with  reference 

to  wages 154 

coinage,  see  Bi-metallism  and 

monometalism 
fineness  in  coinage,  see  fine- 
ness 

Stourbridge  fair,  described 109 

Subsistence  in  family  stage... 35-37 

game 38 

milk  and  meat 44 

increase  of  in  village  stage  . .    97 
increase  of  with  reference  to 

increase  of  population 176 

increasing  with  development 

of  industrial  society 177 

Surroundings,  struggles  of  ani- 
mals with 21 

Syndicates 145-146 

English,  in  United  States 219 

T. 

Tariff  laws,  general  discussion. 

213-223 

Tariffs,  kinds  of 213-214 

Taxes,  who  pays 126 

Telegraphy,  marine,  as  an  ele- 
ment in  industrial  revolu- 
tion  183-184 


INDEX. 


247 


PAGE. 

Thompson,  J.  Arthur,  on  eco- 
nomic struggles  of  ani- 
mals.-     20 

Tools,  progressive  use  of 98 

Town  and  city,  distinctions  be- 
tween   102 

Trade,  control  of  family 55-57 

character  of 209 

control  of  village 89,  90,  210 

village 90 

builds  cities 103 

organization  of  by  merchant 

gild 115-116 

causing  need  of  money 127 

control  of  in  city  economics. 

116,  132,  210 

international,  general  discus- 
sion   207-222 

balanceof 211 

Trader,   maritime,   characteris- 

istics  of 107 

inland 108 

Trader's   employment,   growth 

of 110 

Trades      unions,      illustrating 
growth  of  labor  organ iza 

tions 154 

development  of 157 

original  purposes  of 158 

in  the  United  States 158 

Taxes  on  early  trade 108 

Transportation,     internation . . 

232-233 

Truck  economy  in  village  com- 
munity life 89 

disadvantage  of 93,  94 

Trusts 145,  146 

V. 

Venice  in  city  economics 104 

prosperity  of  and  balance  of 
trade  theory 211 


PAOB. 

Village  community,  economic 

characteristics  of 73-78 

of  east  and  west  compared 

75-78 

Village  sites,  selection  of 74 

Village  community   life    sup- 
planting nomadic  life 73 

among  Pueblos 70-77 

Village    trade,     control     and 

character  of 89-90 

capital,  increase  of 91 

manufactures,  character  of..    92 

sources  of  subsistence 97 

isolation 99 

economy,  diflferentiation  of..  101 

craftsmen 117 

Village  distribution  of  land  in..  123 
membership  of  involving  land 
holding 123 


W. 

Wage  fund  theory 154 

Wages,  Lasalle's  law 153-154 

raised  by  labor  organizations  159 

paid  by  scale  system 165,  232 

affecting  amount   of  money 

needed 190 

Wampum  as  money 96,  193 

Wants,  the  three  classes 9 

economic  dependence  in  the 

satisfaction  of 9 

the  three  necessary 19 

distinguishing  man  and  ani- 
mals     24 

increasing   with    civilization 

25,27 

satisfaction     of     depending 

upon  industrial  society 26 

of  family  economics 47 

of  food,  clothing  and  shelter 

of  the  family  stage 47-48 

lack  of  in  family  stage 4P 


2iS 


INDEX. 


PAGE. 

lack  of    affecting   economic 
progress 49 

increase  of  in  tlie  city  stage..  101 

Wasp,  storing  for  future  use 51 

Weapons,  barter  in 56 

common  property  in 52 

Wheat,  rate  of  increase  of 176 

Working  class 124 

see  also  classes,  and  employer 
and  employe  class. 
World  market,  the 208,232 


PAGE. 

economy,  general  discussion 

...229-236 

World's  parliament  of  religions  236 


Zuni,  illustration  of  village  eco- 
nomics  76 

Zurich,  international  labor  con- 
gress at  - 1  -  231 


20863 


